# In the matter of KRR Infra Projects Privae Limited CP (IB) No. 430-7-HDB-2020

> NCLT judgment dated 2021-08-06. Citation: TCN-2021-NCLT-01425. The case involves a company application filed by State Bank of India under Section 7 of the…

- **Court:** NCLT
- **Order date:** 6 Aug 2021
- **Citation:** TCN-2021-NCLT-01425
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/krr-infra-projects-privae-limited-cp-ib-no-430-7-hdb-2020-1bdd5c2a

## Summary

### Background

The case involves a company application filed by State Bank of India under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against K.R.R. Infra Projects Private Limited. The Corporate Debtor had been availing fund-based and non-fund-based working capital loan facilities from the Financial Creditor since 2008. The Financial Creditor sanctioned various credit facilities to the Corporate Debtor over time, including cash credit facilities, ad-hoc fund-based working capital facilities, and enhancements to existing limits. The Corporate Debtor created hypothecation charges on its assets and provided personal guarantees and corporate guarantees. However, the Corporate Debtor started defaulting on

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## Facts

K.R.R. Infra Projects Private Limited (Corporate Debtor) had been availing fund-based and non-fund-based working capital loan facilities from State Bank of India (Financial Creditor) since 2008. The Financial Creditor sanctioned various credit facilities, including cash credit (Hypothecation) Limit to the tune of Rs.5 Crore at an interest @13.75 p.a. with monthly compounding, ad-hoc Fund Based Working Capital (FBWC) facility to the tune of Rs.3 Crore, and additional loan facilities to the tune of Rs.18 Cr vide its Sanction Letter dated 02.07.2009. The Corporate Debtor was initially a partnership firm but was later converted into a Private Limited Company with consent of its partners and passed a Board Resolution dated 24.8.2009 resolving to take over the liability of

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has proved its case by placing evidence that default has occurred …

**Ratio:** The legal principle is that a financial creditor must demonstrate that a default has

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**Reasoning:** The Adjudicating Authority reasoned that the Financial Creditor had presented sufficient

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**Interpretation:** This issue involves interpreting Section 7 of the IBC, 2016, which outlines the

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**Application:** In this specific case, the Financial Creditor provided detailed documentation

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## Parties

- **Judges:** Madan B.…; BINOD KUMAR…
- **Appellants:** State Bank of…
- **Respondents:** K.R.R. Infra…; K.R.R.Infraproject…

## Timeline

- **2008-01-01 — Loan Facilitie…**: Corporate Debtor started availing fund-based and non-fund-based working capital loan…
- **2009-07-02 — Sanction…**: Financial Creditor enhanced the loan…

## 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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