# in the matter of Garg Inox Ltd. IB No. (IB)-194-ND-2017

> NCLT judgment dated 2017-07-25. Citation: TCN-2017-NCLT-00701. State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 25 Jul 2017
- **Citation:** TCN-2017-NCLT-00701
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/garg-inox-ltd-ib-no-ib-194-nd-2017-7cd312d3

## Summary

### Background

State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against M/s Garg Inox Ltd., the Corporate Debtor, due to their default in repayment of loans. The Corporate Debtor had been enjoying various credit facilities from the Petitioner Bank, which were restructured multiple times to enable the Corporate Debtor to regularize their accounts. Despite these restructurings, the Corporate Debtor failed to reduce its liability, and the account was declared an NPA according to RBI guidelines.

## Facts

State Bank of India (SBI), the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against M/s Garg Inox Ltd., the Corporate Debtor, due to default in loan repayment. The Corporate Debtor had been availing credit facilities from SBI, which were restructured multiple times since December 2006 to help them regularize their accounts. The last restructuring occurred in 2016. Despite these efforts, the Corporate Debtor failed to reduce its liability, leading to the account being classified as a Non-Performing Asset (NPA) as per Reserve Bank of India (RBI) guidelines. The total amount claimed to be in default was approximately Rs. 185 crores. SBI also initiated action under SARFAESI but felt that a Resolution process would

…

## Issues and analysis

### Issue 1: Whether the petition filed by the State Bank of India meets the requirements for initiating the …

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

…

**Reasoning:** The court reasoned that the petition filed by the State Bank of India fulfilled the

…

**Interpretation:** Section 7 of the IBC is interpreted to provide a mechanism for financial

…

**Application:** The court applied the ratio to the facts of the case, noting that the State

…

## Parties

- **Judges:** Ina Mal…; S. K. MOH…
- **Appellants:** State Bank of…
- **Respondents:** M/s Garg In…
- **Advocates:** Sameer Ra…; Yatin Sac…

## Timeline

- **2006-12-01 — Corporate Debtor…**: M/s Garg Inox Ltd. had been availing various…
- **2016-01-01 — Loan Restru…**: Loans were last restructured and credit limits extended in the year 2016 on fresh…

## 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/garg-inox-ltd-ib-no-ib-194-nd-2017-7cd312d3