# in the matter of K S Oils Ltd. CP (IB) No. 32-7-AHM-2017

> NCLT judgment dated 2017-07-21. Citation: TCN-2017-NCLT-00708. SREI Infrastructure Finance Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 21 Jul 2017
- **Citation:** TCN-2017-NCLT-00708
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/k-s-oils-ltd-cp-ib-no-32-7-ahm-2017-e23323ef

## Summary

### Background

SREI Infrastructure Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against K.S. Oils Limited. The application pertains to a Rupee Term Loan of Rs. 100 Crores sanctioned by SREI to K.S. Oils on August 16, 2010. A Rupee Loan Agreement No. SRE 130 was entered into on August 23, 2010. K.S. Oils executed a Deed of Hypothecation, Demand Promissory Note, and Mr. Ramesh Chandra Garg executed a Deed of Guarantee, all dated August 23, 2010, as security. K.S. Oils failed to make payments, and various cheques were dishonored. SREI initiated proceedings under the Negotiable Instruments Act. A Supplementary Agreement was entered into on September 2, 2011, and a Master Restructuring Agreement on March 14, 2012. SREI became a CDR

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## Facts

SREI Infrastructure Finance Limited (the Applicant) sanctioned a Rupee Term Loan of Rs. 100 Crores to K.S. Oils Limited (the Respondent) on August 16, 2010. The terms and conditions were accepted, and a Rupee Loan Agreement No. SRE 130 was entered into on August 23, 2010. As security, K.S. Oils executed a Deed of Hypothecation dated August 23, 2010, a Demand Promissory Note, and Mr. Ramesh Chandra Garg executed a Deed of Guarantee dated August 23, 2010. K.S. Oils failed to make payments, and various cheques were dishonored. SREI initiated proceedings under the Negotiable Instruments Act. A Supplementary Agreement was entered into on September 2, 2011, and a Master Restructuring Agreement on March 14, 2012. SREI became a CDR Lender on June 28, 2013, but the CDR package

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## Issues and analysis

### Issue 1: Whether the application filed by SREI Infrastructure Finance Limited under Section 7 of the …

**Ratio:** Section 7(5) of the Insolvency and Bankruptcy Code, 2016, allows the Adjudicating

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**Reasoning:** The Adjudicating Authority examined the Rupee Loan Agreement, Deed of Hypothecation,

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**Interpretation:** Section 7 of the IBC provides a mechanism for initiating the Corporate

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**Application:** The Adjudicating Authority found that K.S. Oils Limited had defaulted on its

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** Srei Infrastructur…
- **Respondents:** K. S. Oil…

## Timeline

- **2010-08-16 — Loan Sanc…**: Applicant sanctioned Rupee Term Loan…
- **2010-08-23 — Loan Agre…**: Rupee Loan Agreement No. SRE 130 was entered…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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