# In the matter of Kannu Aditya (India) Limited Company Petitiion No. (IB)-1275 (PB)-2018

> NCLT judgment dated 2019-05-22. Citation: TCN-2019-NCLT-03224. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 22 May 2019
- **Citation:** TCN-2019-NCLT-03224
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kannu-aditya-india-limited-company-petitiion-no-ib-1275-pb-2018-c01f3a18

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Kannu Aditya (India) Limited, the corporate debtor. The application was based on the corporate debtor's failure to repay outstanding dues amounting to Rs. 306,86,83,742.44/- as of 22.07.2018. The corporate debtor had availed various working capital facilities from a consortium of banks, including State Bank of Mysore, State Bank of Travancore, and State Bank of Bikaner and Jaipur. The account was classified as NPA on 07.06.2017. Despite legal demand notices, the corporate debtor failed to liquidate the outstanding amount.

## Facts

State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Kannu Aditya (India) Limited, the corporate debtor. SBI claimed that the corporate debtor had defaulted on a financial debt amounting to Rs. 306,86,83,742.44/- as of 22.07.2018. The corporate debtor had availed various working capital facilities from a consortium of banks, including State Bank of Mysore, State Bank of Travancore, and State Bank of Bikaner and Jaipur. These banks later merged with State Bank of India. The loan account was classified as Non-Performing Asset (NPA) on 07.06.2017. SBI sent legal demand notices to the corporate debtor, but the debtor failed to liquidate the

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, is …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The NCLT found that the applicant bank had placed on record sufficient evidence to prove

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** In this case, the NCLT found that the applicant bank had established a default

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** State Bank of…
- **Respondents:** M/s Kannu Aditya…
- **Advocates:** Ankur M…; Karan S…; +5 more

## Timeline

- **2017-06-07 — Account Classified as…**: The loan account of M/s Kannu Aditya (India) Limited was classified as Non-Performing…
- **2018-07-22 — Outstandin…**: The outstanding dues of M/s Kannu Aditya (India) Limited amounted to Rs.…

## 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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