# In the matter of Bhushan Energy Limited C.P. No. (IB)-530(PB)-2017

> NCLT judgment dated 2018-01-08. Citation: TCN-2018-NCLT-01951. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 8 Jan 2018
- **Citation:** TCN-2018-NCLT-01951
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bhushan-energy-limited-cp-no-ib-530pb-2017-785e36bc

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process against Bhushan Energy Limited. The 'financial creditor' is a bank established by the State Bank of India Act, 1955. The corporate debtor, Bhushan Energy Limited, is a public company limited by shares, incorporated on 14.09.2005. The total amount of debt granted to the Corporate Debtor is Rs. 398,08,74,018/-. The facilities availed by the Corporate Debtor are overdue, and the total amount in default as on 31.10.2017 is Rs. 494,09,47,034.76/-.

## Facts

State Bank of India (SBI), the 'Financial Creditor', filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Bhushan Energy Limited, the 'Corporate Debtor'. SBI claimed that Bhushan Energy Limited had defaulted on loan repayments. The total debt granted to Bhushan Energy Limited amounted to Rs. 398,08,74,018/-. As of 31.10.2017, the total amount in default was Rs. 494,09,47,034.76/-. SBI presented evidence of the debt, including loan agreements, account statements, and balance confirmation letters. Bhushan Energy Limited contested the application, arguing that the petition was not maintainable because the person who filed the petition was not authorized to do so, and

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## Issues and analysis

### Issue 1: Whether the petition filed by State Bank of India is maintainable given the objections raised by …

**Ratio:** Section 27 of the State Bank of India Act, 1955, read with Regulation 77 of the State

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**Reasoning:** The NCLT reasoned that the Chairperson's powers are of the widest amplitude, and the

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**Interpretation:** This interpretation clarifies that the Chairperson of the State Bank of India

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**Application:** The NCLT applied this ratio to the facts by finding that the authorization

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## Parties

- **Judges:** M. M. K…; DeepaKr…
- **Appellants:** State Bank of…
- **Respondents:** Bhushan Energy…

## Timeline

- **2005-09-14 — Incorporation of…**: Bhushan Energy Limited incorporated as…
- **2010-09-30 — Original Loan…**: Common Loan Agreement dated 30.09.2010 among Corporate Debtor, inter alia the Financial…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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