# In the matter of Mackeil Ispat & Forging Ltd. C.P. (IB) No. 213-KB-2019

> NCLT judgment dated 2020-02-03. Citation: TCN-2020-NCLT-02099. State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 3 Feb 2020
- **Citation:** TCN-2020-NCLT-02099
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mackeil-ispat-forging-ltd-cp-ib-no-213-kb-2019-3c688ec8

## Summary

### Background

State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Mackeil Ispat & Forging Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). SBI, as the lead bank of a consortium of lenders, had extended various credit facilities to Mackeil Ispat & Forging Limited. Due to the Corporate Debtor's failure to meet its financial obligations, the account was declared a non-performing asset (NPA). SBI initiated this application after the Corporate Debtor defaulted on payments, with the total debt amounting to Rs. 217,42,97,170.42 as of January 19, 2018.

## Facts

1. State Bank of India (SBI), acting as the lead bank of a consortium, extended credit facilities to Mackeil Ispat & Forging Limited.
2. The initial loan of Rs. 83.00 crores was sanctioned under a "Term Loan Consortium Facility".
3. Additional working capital facilities were extended, bringing the total loan amount to Rs. 94.83 crores.
4. The credit facilities were restructured via a Master Restructuring Agreement (MRA) dated March 21, 2012, due to the Corporate Debtor's failure to meet financial obligations.
5. The Corporate Debtor's accounts were declared as non-performing assets (NPA) effective March 31, 2013.
6. SBI issued a demand and recall letter dated February 25, 2015, recalling the restructured facilities.
7. The Corporate Debtor failed to make

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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 considered the evidence presented by SBI, including the loan agreements,

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**Interpretation:** Section 7 of the IBC is interpreted to provide a mechanism for financial

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**Application:** The NCLT found that Mackeil Ispat & Forging Limited had defaulted on its

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** State Bank of…
- **Respondents:** M/S. MACKEIL…

## Timeline

- **2008-08-05 — Common Rupee Loan…**: A common rupee loan agreement…
- **2008-11-29 — Amendment to Loan…**: The common rupee loan agreement was amended to include the loan facility extended by…

## 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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