# In the matter of Jai Bhavani Steels Enterprises Private Limited CP-183- (IB)-2018

> NCLT judgment dated 2018-04-02. Citation: TCN-2018-NCLT-01612. The case pertains to a petition filed by M/s. SREI Equipment Finance Limited (Financial…

- **Court:** NCLT
- **Order date:** 2 Apr 2018
- **Citation:** TCN-2018-NCLT-01612
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jai-bhavani-steels-enterprises-private-limited-cp-183-ib-2018-5b57e8ba

## Summary

### Background

The case pertains to a petition filed by M/s. SREI Equipment Finance Limited (Financial Creditor) against M/s. Jai Bhavani Steels Enterprises Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor sought initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to its inability to pay the financial debt. The Corporate Debtor acknowledged the debt but requested more time to repay. The Financial Creditor approached the Adjudicating Authority after the Corporate Debtor failed to repay the debt.

## Facts

M/s. SREI Equipment Finance Limited (Financial Creditor) filed a petition against M/s. Jai Bhavani Steels Enterprises Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. Both parties are public companies registered under the Companies Act, 1956. The Corporate Debtor's registered office is located in Thiruvallur, and it is engaged in the trade of iron and steel items. The Corporate Debtor had approached M/s. SREI Infrastructure Finance Limited for a rupee loan of Rs. 25 crore, and an agreement was entered into on 01.04.2006. The rights and powers related to M/s. SREI Infrastructure Finance Limited were transferred to the Financial Creditor. The Financial Creditor issued a demand notice dated 14.05.2016, and the Corporate

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in the …

**Ratio:** The legal principle is that if a corporate debtor fails to repay a financial debt to a

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**Reasoning:** The Adjudicating Authority relied on the evidence presented by the Financial Creditor,

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**Interpretation:** Section 7 of the IBC, 2016 allows a financial creditor to initiate CIRP against

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**Application:** The Corporate Debtor acknowledged the debt but failed to repay it. The

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## Parties

- **Judges:** K. Anantha…; S. VIJAYARA…
- **Respondents:** M/s. Jai Bhavani…

## Timeline

- **2006-04-01 — Loan Agre…**: An agreement was entered into between M/s. SREI Infrastructure Finance Limited and the…
- **2008-03-04 — Transfer of…**: The rights and powers related to M/s. SREI Infrastructure Finance Limited were…

## 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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