# In the matter of Genegrow Commercial Pvt. Ltd. C.P. (IB) No. 353-KB-2018

> NCLT judgment dated 2019-08-02. Citation: TCN-2019-NCLT-02124. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 2 Aug 2019
- **Citation:** TCN-2019-NCLT-02124
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/genegrow-commercial-pvt-ltd-cp-ib-no-353-kb-2018-1f9d2919

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Genegrow Commercial Pvt. Ltd., the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The application was based on the Corporate Debtor's failure to repay loan facilities for which it acted as a corporate guarantor for the principal borrower, Gee Pee Infotech Pvt. Ltd. The account of the principal borrower was classified as a Non-Performing Asset (NPA). The Financial Creditor claimed a total outstanding amount of Rs. 162,62,23,609.63 as of 31-01-2018. The Corporate Debtor contested the application, arguing non-compliance with RBI circulars and press releases.

## Facts

State Bank of India (SBI), the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Genegrow Commercial Pvt. Ltd., the Corporate Debtor, seeking initiation of Corporate Insolvency Resolution Process (CIRP). Genegrow Commercial Pvt. Ltd. acted as a corporate guarantor for the principal borrower, Gee Pee Infotech Pvt. Ltd. SBI had granted loan and credit facilities to Genegrow Commercial Pvt. Ltd. at the request of the Corporate Debtor, to the Principal Borrower, Gee Pee Infotech Pvt. Ltd. The credit facilities were enjoyed by the Principal Borrower since March 2006 and were last sanctioned on 15th March, 2014. The Corporate Debtor executed a Deed of Guarantee dated 05-10-2009 for the overall limit with the

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## Issues and analysis

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

**Ratio:** The application under Section 7 of the IBC is maintainable if the Financial Creditor

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**Reasoning:** The NCLT considered the arguments of both parties and examined the evidence presented,

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**Interpretation:** Section 7 of the IBC allows a Financial Creditor to initiate CIRP against a

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**Application:** In this case, the NCLT found that the Financial Creditor had demonstrated the

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** State Bank of…
- **Respondents:** Genegrow Commercia…

## Timeline

- **2006-03-01 — Credit Facilities…**: The Principal Borrower had been enjoying various credit facilities granted by the Bank…
- **2014-03-15 — Last Sanction of Credit…**: The credit facilities were last sanctioned on 15th March, 2014 by the Applicant at 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)

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