# In the matter of Coastal Projects Ltd. CP (IB) No. 593-KB-2017

> NCLT judgment dated 2018-01-05. Citation: TCN-2018-NCLT-01961. The State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 5 Jan 2018
- **Citation:** TCN-2018-NCLT-01961
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/coastal-projects-ltd-cp-ib-no-593-kb-2017-b59dbdf1

## Summary

### Background

The State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Coastal Projects Ltd. The application was filed due to the corporate debtor's default in making a payment of Rs. 975,27,33,040.53. The applicant bank claimed that the corporate debtor had taken various financial credit facilities and withdrawn money, leading to the default. The bank also submitted documents, including a copy of the recall notice for sacrifices and concessions granted under a Master Restructuring Agreement, and a report from CRILC indicating the corporate debtor's account status as Substandard and Doubtful.

## Facts

State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Coastal Projects Ltd. SBI claimed that Coastal Projects Ltd. defaulted on a payment of Rs. 975,27,33,040.53. SBI, incorporated on July 1, 1955, under the State Bank of India Act, 1955, included merged entities like State Bank of Hyderabad, State Bank of Travancore, State Bank of Bikaner, and Jaipur, effective from April 1, 2017. SBI submitted that it had granted credit facilities to Coastal Projects Ltd., including fund-based facilities aggregating to Rs. 919,68,00,000/- and non-fund-based instruments aggregating to Rs. 422,21,00,000/-. SBI revoked and recalled all sacrifices, concessions,

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## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor under Section 7 of the Insolvency & …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The court observed that the corporate debtor had defaulted on its payment obligations and

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**Interpretation:** Section 7 of the IBC provides the mechanism for financial creditors to trigger

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**Application:** The court applied Section 7 to the facts of the case, noting that the financial

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## Parties

- **Judges:** V. P. S…; Jinan…
- **Appellants:** State Bank of…
- **Respondents:** Coastal Projects…
- **Advocates:** Biswajit…; Saumik B…; +4 more

## Timeline

- **1955-01-01 — Enactment of the State…**: The State Bank of India was incorporated…
- **1995-07-01 — Incorporation of State…**: State Bank of India is a corporate…

## 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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