# in the matter of Essar Steels Ltd. C.P(I.B) No.40-7-NCLT-Ahm-2017

> NCLT judgment dated 2017-08-02. Citation: TCN-2017-NCLT-00669. Standard Chartered Bank (SCB) and State Bank of India (SBI) initiated Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 2 Aug 2017
- **Citation:** TCN-2017-NCLT-00669
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/essar-steels-ltd-cpib-no40-7-nclt-ahm-2017-f7df64fd

## Summary

### Background

Standard Chartered Bank (SCB) and State Bank of India (SBI) initiated Corporate Insolvency Resolution Process (CIRP) against Essar Steel India Limited (ESSAR) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) due to default in repayment of financial debts. The applications were heard together by the NCLT Ahmedabad Bench.

## Facts

Standard Chartered Bank (SCB) and State Bank of India (SBI) initiated the Corporate Insolvency Resolution Process (CIRP) against Essar Steel India Limited (ESSAR) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). SCB, a banking corporation incorporated in England, and SBI, constituted under the State Bank of India Act, 1955, both claimed to be financial creditors to ESSAR. The applications were filed due to ESSAR's alleged default in repaying financial debts. SCB provided a loan of US $413,000,000 to Essar Steel Offshore Limited (ESOL) on January 3, 2014, which was guaranteed by ESSAR under Clause 17 of the Facility Agreement. ESOL defaulted in repayment starting January 2015. SCB issued a demand notice to ESOL on September 15, 2015, and to ESSAR on

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## Issues and analysis

### Issue 1: Whether the applications filed by Standard Chartered Bank and State Bank of India under Section 7 …

**Ratio:** An application under Section 7 of the IBC must be admitted if it is complete, a default

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**Reasoning:** The Adjudicating Authority reviewed the documents submitted by SCB and SBI, including

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**Interpretation:** The court interpreted Section 7 of the IBC to require the Adjudicating

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**Application:** The NCLT applied this interpretation by confirming the default based on the

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** Standard Chartered…; State Bank of…
- **Respondents:** Essar Steel India…
- **Advocates:** Sr. Cou…; Rasesh Sanjanwala,…; +10 more

## Timeline

- **January 3, 2014 — Loan provided…**: Standard Chartered Bank provided a loan of US $413,000,000 to Essar Steel Offshore…
- **February 7, 2014 — Facility Agreement…**: The Facility Agreement dated…

## 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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