# In the matter of Facor Steel Ltd C.P. 18-I&BP- NCLT-MAH-2017

> NCLT judgment dated 2017-03-08. Citation: TCN-2017-NCLT-00956. The case pertains to an application filed by Facor Steel Limited under Section 10 of the…

- **Court:** NCLT
- **Order date:** 8 Mar 2017
- **Citation:** TCN-2017-NCLT-00956
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/facor-steel-ltd-cp-18-ibp-nclt-mah-2017-16ea29c7

## Summary

### Background

The case pertains to an application filed by Facor Steel Limited under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). Facor Steel Limited, the corporate debtor, was incorporated on 13.05.2004. The company owes ₹34,21,00,000 to financial creditors and US $ 56,872.00 to Baltic International Bank. Bank of India, the lead bank in a consortium, had previously issued a notice under Section 13(2) of the SARFAESI Act, 2002, for recovery of ₹2836.81 lakhs with interest. The corporate debtor, being unable to make payments to the consortium banks, filed the application for CIRP.

## Facts

Facor Steel Limited, incorporated on 13.05.2004, filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP). The company owes ₹34,21,00,000 to financial creditors and US $ 56,872.00 to Baltic International Bank. Bank of India, as the lead bank in a consortium, issued a notice under Section 13(2) of the SARFAESI Act, 2002, for recovery of ₹2836.81 lakhs with interest, indicating a default. The company submitted audited financial statements for 2014-15 and 2015-16, and a provisional financial statement up to 31.01.2017, along with lists of debtors, creditors, assets, and liabilities as of 31.01.2017. The corporate debtor has created a charge over the assets of the Company in favour of Bank

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## Issues and analysis

### Issue 1: Whether the application filed by the corporate debtor, Facor Steel Limited, under Section 10 of the …

**Ratio:** Section 10 of the Insolvency and Bankruptcy Code, 2016, allows a corporate debtor to

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**Reasoning:** The court considered the documents submitted by the corporate debtor, including financial

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**Interpretation:** Section 10 provides an opportunity for a corporate debtor facing financial

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**Application:** The court applied Section 10 to the facts of the case, noting that Facor Steel

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## Parties

- **Judges:** B.S.V. Prakash…; V. Nallasen…
- **Respondents:** Facor Steel…

## Timeline

- **2004-05-13 — Incorporation of…**: Facor Steel Limited was…
- **2015-07-25 — SARFAESI Notic…**: Bank of India issued a notice under Section 13(2) of the SARFAESI Act, 2002, for recovery…

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