# In the matter of G K Steel and Allied Industries Ltd. CP-1006-IB-2018

> NCLT judgment dated 2019-12-20. Citation: TCN-2019-NCLT-00031. The case involves an application filed by IFCI Limited, the Financial Creditor, under Section 7…

- **Court:** NCLT
- **Order date:** 20 Dec 2019
- **Citation:** TCN-2019-NCLT-00031
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/g-k-steel-and-allied-industries-ltd-cp-1006-ib-2018-63e8a4da

## Summary

### Background

The case involves an application filed by IFCI Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. G.K. Steels And Allied Industries Ltd., the Corporate Debtor. The Financial Creditor sought to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare a moratorium, and appoint an Interim Resolution Professional (IRP). The Financial Creditor, along with IDBI and ICICI, had sanctioned term loans to the Corporate Debtor in 1988. The Corporate Debtor's account was declared a Non-Performing Asset (NPA) in 1998. Several legal proceedings, including those before the Debt Recovery Tribunal (DRT) and the Board for Industrial and Financial Reconstruction (BIFR), ensued. The Corporate

…

## Facts

IFCI Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. G.K. Steels And Allied Industries Ltd. (Corporate Debtor) to initiate Corporate Insolvency Resolution Process (CIRP). The Financial Creditor, along with IDBI and ICICI, sanctioned term loans to the Corporate Debtor amounting to Rs.695 Lakhs in 1988. A loan agreement was executed on 11.07.1988. A deed of hypothecation was executed on 11.07.1988. The Financial Creditor secured its loan through a joint mortgage on 17.09.1989. An additional loan of Rs.148 Lakhs was approved on 25.07.1991. A loan agreement for the second loan was entered on 11.03.1992. A deed of hypothecation was executed on 11.03.1992. A deed of guarantee was executed on

…

## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

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

…

**Reasoning:** The court considered the precedents set by the Supreme Court and determined that the

…

**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial debt exists and

…

**Application:** In this case, the Financial Creditor demonstrated the existence of a financial

…

## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** IFCI Li…
- **Respondents:** M/s. G.K. STEEL…

## Timeline

- **1988-03-11 — Term Loan San…**: Financial Creditor along with IDBI and ICICI sanctioned term loans to the Corporate…
- **1988-07-11 — Loan Agreement…**: A Loan Agreement was entered by the…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/g-k-steel-and-allied-industries-ltd-cp-1006-ib-2018-63e8a4da