# In the matter of Conros Steels Pvt. Ltd. CP No. 1561-I&BP-2017

> NCLT judgment dated 2017-12-19. Citation: TCN-2017-NCLT-00029. Punjab National Bank (PNB) filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 19 Dec 2017
- **Citation:** TCN-2017-NCLT-00029
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/conros-steels-pvt-ltd-cp-no-1561-ibp-2017-94cf84d2

## Summary

### Background

Punjab National Bank (PNB) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of the Corporate Insolvency Resolution Process (CIRP) against Conros Steels Pvt. Ltd. (Corporate Debtor). The basis for the application was the Corporate Debtor's default on 31.03.2012 in repayment of ₹60,59,67,926.00. The Corporate Debtor had also filed CP No.1513 of 2017 for initiation of corporate insolvency process under section 10 of the Code. The petitioner had sanctioned ₹5 crores as Working Capital facility and a non-fund based limit of ₹20 crores to the Corporate Debtor 24.12.2009, and both the above facilities were renewed on 23.2.2011. Subsequently on 26.2.2011, the Corporate Debtor entered into a first supplemental working

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## Facts

Punjab National Bank (PNB) sought to initiate the Corporate Insolvency Resolution Process (CIRP) against Conros Steels Pvt. Ltd. (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor defaulted on 31.03.2012 in repayment of ₹60,59,67,926.00. PNB had sanctioned ₹5 crores as Working Capital facility and a non-fund based limit of ₹20 crores to the Corporate Debtor 24.12.2009, and both the above facilities were renewed on 23.2.2011. Subsequently on 26.2.2011, the Corporate Debtor entered into a first supplemental working capital consortium with many Financial Institutions including the Petitioner, wherein the Bank of India Consortium enhanced the facility enjoyed by the Corporate Debtor from ₹177.50 crores to ₹227.50 crores.

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating …

**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 in repaying the loan availed

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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

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## Parties

- **Judges:** B.S.V. Prakash…; V. Nallasen…
- **Appellants:** Punjab National…
- **Respondents:** Conros Steels…
- **Advocates:** Alhul…

## Timeline

- **2009-12-24 — Loan San…**: Punjab National Bank sanctioned ₹5 crores as Working Capital facility and a non-fund…
- **2011-02-23 — Loan Ren…**: The above facilities…

## 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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