# 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-01418. The case involves an application filed by State Bank of India (Financial Creditor) under…

- **Court:** NCLT
- **Order date:** 6 Aug 2021
- **Citation:** TCN-2021-NCLT-01418
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/krr-infra-projects-privae-limited-cp-ib-no-430-7-hdb-2020-5a2f1638

## Summary

### Background

The case involves an application filed by State Bank of India (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. K.R.R. Infra Projects Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed that the Corporate Debtor had defaulted on its loan obligations, leading to the classification of the loan accounts as Non-Performing Assets (NPAs). The Financial Creditor had also obtained a judgment from the Debt Recovery Tribunal (DRT) against the Corporate Debtor.

## Facts

The Corporate Debtor, initially a partnership firm, availed both Fund based and Non-Fund based Working Capital Loan Facilities from the Financial Creditor from 2006 onwards. The Financial Creditor sanctioned cash credit to the tune of Rs.5 Crore at an interest of 13.75% p.a. The Corporate Debtor further approached the Financial Creditor requesting sanction of additional loan facilities to the tune of Rs.1.18 Crore. The Corporate Debtor was 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 said partnership firm. The Corporate Debtor again approached the Financial Creditor requesting additional facilities, and enhancement of existing loan facilities. The FC enhanced

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the IBC, 2016 for …

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

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**Reasoning:** The Adjudicating Authority was satisfied that the Financial Creditor had proved its case

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**Interpretation:** Section 7 provides the mechanism for financial creditors to trigger the

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**Application:** The Financial Creditor demonstrated that the Corporate Debtor had defaulted on

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## Parties

- **Judges:** Shri. Madan B.…; BINOD KUMAR…
- **Respondents:** K.R.R. Infra…

## Timeline

- **2006-01-01 — Loan Facilitie…**: The Corporate Debtor availed both Fund based and Non-Fund based Working Capital Loan…
- **2009-08-24 — Board Reso…**: The Corporate Debtor passed a Board Resolution resolving to take over the liability of…

## 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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