# In the matter of DDS Steel Rolling Mills Pvt. Ltd. CP-189-(IB)-2018

> NCLT judgment dated 2018-03-06. Citation: TCN-2018-NCLT-01746. SREI Equipment Finance Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 6 Mar 2018
- **Citation:** TCN-2018-NCLT-01746
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dds-steel-rolling-mills-pvt-ltd-cp-189-ib-2018-aefa2d73

## Summary

### Background

SREI Equipment Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against DDS Steel Rolling Mills Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed an outstanding debt of Rs. 69,44,89,923 as of 31.12.2017. The Corporate Debtor had sought a loan of Rs. 10 Crores in 2006, with an agreement to pay interest at 6% p.a. The Corporate Debtor defaulted on repayments, leading to the Financial Creditor issuing demand notices. The Corporate Debtor admitted to the outstanding amount but was unable to make payments or file a counter to resist the application.

## Facts

SREI Equipment Finance Limited (Financial Creditor) and DDS Steel Rolling Mills Private Limited (Corporate Debtor) entered into a loan agreement on 26.03.2006, where the Corporate Debtor sought a loan of Rs. 10 Crores by the end of June 2007, with a 6% annual interest rate. The Financial Creditor advanced Rs. 5 Crores on 28.03.2007. The Corporate Debtor made some payments but subsequently defaulted on the loan agreement terms. The Financial Creditor issued a demand notice on 20.06.2016, to which the Corporate Debtor replied on 05.07.2016, admitting the amount. A final demand notice was sent on 11.09.2017, which received no reply. The Financial Creditor claimed an outstanding debt of Rs. 69,44,89,923 as of 31.12.2017. The Corporate Debtor admitted its inability to make

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## Issues and analysis

### Issue 1: Whether the Financial Creditor's application under Section 7 of the Insolvency and Bankruptcy Code, …

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

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**Reasoning:** The court reasoned that the Corporate Debtor had defaulted on its repayment obligations

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues by

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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:** Ch. Mohd Sharief…
- **Appellants:** SREI EQUIPMENT…
- **Respondents:** DDS STEEL ROLLING…

## Timeline

- **2006-03-26 — Loan Agre…**: Financial Creditor and Corporate Debtor entered into a loan agreement where the Corporate…
- **2007-03-28 — Loan Adv…**: Financial Creditor advanced Rs. 5…

## 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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