# In the matter of Hanumanta Engineering Private Limited CP (IB) No. 1111-KB-2018

> NCLT judgment dated 2019-08-19. Citation: TCN-2019-NCLT-01920. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 19 Aug 2019
- **Citation:** TCN-2019-NCLT-01920
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/hanumanta-engineering-private-limited-cp-ib-no-1111-kb-2018-b92851f4

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Hanumanta Engineering Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The application was based on the corporate debtor's failure to comply with the terms and conditions of loan agreements and credit limits, resulting in a default of Rs. 173,85,76,484.56. The corporate debtor contested the application, arguing that the financial creditor suppressed facts, charged excessive interest rates, and that the application was barred by limitation. The corporate debtor also claimed that parallel proceedings were initiated by the financial creditor and that an existing order from the High Court prevented the initiation of CIRP.

## Facts

State Bank of India (SBI), the financial creditor, sanctioned credit facilities to Hanumanta Engineering Private Limited, the corporate debtor. These facilities included cash credit and export packing facilities, secured by hypothecation of raw materials, stocks, book debts, and mortgage of immovable properties. Over time, the credit limits were enhanced and restructured. The corporate debtor defaulted on repayment, leading to the account being classified as a Non-Performing Asset (NPA) on August 6, 2012. SBI issued a demand notice on January 10, 2013, but the corporate debtor failed to pay the outstanding amount. SBI filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) on August 10, 2018, seeking initiation of the Corporate Insolvency

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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 Limitation Act, 1963 is applicable to the Insolvency and Bankruptcy Code by way of

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**Reasoning:** The NCLT reasoned that the cause of action for initiating proceedings under the IBC is

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**Interpretation:** The NCLT interpreted Section 238-A of the IBC in conjunction with the

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

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** State Bank of…
- **Respondents:** Hanumanta…; M/S. HANUMANTA…

## Timeline

- **2007-10-15 — Sanction of Credit…**: Financial Creditor sanctioned Cash Credit Facility of Rs. 250.00 Lakhs and Export Packing…
- **2009-01-10 — Renewal of Cre…**: Financial Creditor sanctioned and/or allowed and/or renewed the aggregate Credit Limit of…

## 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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