# In the matter of Chadalavada Infratech Limited CP (IB) No. 1-7-HDB-2020

> NCLT judgment dated 2021-09-23. Citation: TCN-2021-NCLT-01030. The State Bank of India (SBI) filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 23 Sept 2021
- **Citation:** TCN-2021-NCLT-01030
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/chadalavada-infratech-limited-cp-ib-no-1-7-hdb-2020-44d9a633

## Summary

### Background

The State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Chadalavada Infratech Limited, the Corporate Debtor, for default of financial debt amounting to Rs. 216,95,55,314.55 as on 31.10.2019. SBI, the Financial Creditor, had sanctioned fund-based and non-fund-based credit limits to the Corporate Debtor, which were enhanced from time to time. The Corporate Debtor defaulted on its repayment obligations, leading to its account being classified as NPA on 15.04.2011. Despite restructuring and OTS proposals, the default persisted, prompting SBI to file the application for initiating Corporate Insolvency Resolution Process (CIRP).

## Facts

State Bank of India (SBI) is the Financial Creditor. Chadalavada Infratech Limited is the Corporate Debtor. SBI sanctioned credit facilities to Chadalavada Infratech Limited, which were enhanced over time. The Corporate Debtor defaulted on its repayment obligations. The account of the Corporate Debtor was classified as NPA on 15.04.2011. The Corporate Debtor requested restructuring and submitted OTS proposals. SBI issued a demand notice under Section 13(2) of the SARFAESI Act, 2002. The Corporate Debtor failed to pay the amounts due. SBI filed an application under Section 7 of the IBC, 2016, for initiation of CIRP. The Corporate Debtor contended that the application was barred by limitation. The debt amount was Rs. 216,95,55,314.55 as on 31.10.2019. The Corporate

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the IBC, 2016, is barred …

**Ratio:** The principle of limitation is that a legal action must be initiated within a prescribed

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**Reasoning:** The Adjudicating Authority considered the Corporate Debtor's contention that the

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**Interpretation:** Section 18 of the Limitation Act extends the period of limitation depending

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**Application:** The Corporate Debtor's OTS proposals and restructuring agreements served as

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## Parties

- **Judges:** Shrimadan…; Veera Brahma Rao…
- **Appellants:** State Bank of…
- **Respondents:** Chadalvada…
- **Advocates:** Mr.V.V.S.…; G. Giri…

## Timeline

- **1955-07-01 — Incorporation…**: State Bank of India was…
- **2000-02-09 — Incorporation of Chadalavada Constructions Pvt…**: Chadalavada Constructions…

## 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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