# In the matter of Marutham Steel Industries Private Limited IBA-265-2019

> NCLT judgment dated 2019-03-11. Citation: TCN-2019-NCLT-04509. The case involves an application filed by Marutham Steel Industries Private Limited, the…

- **Court:** NCLT
- **Order date:** 11 Mar 2019
- **Citation:** TCN-2019-NCLT-04509
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/marutham-steel-industries-private-limited-iba-265-2019-0b64c15c

## Summary

### Background

The case involves an application filed by Marutham Steel Industries Private Limited, the Corporate Applicant, under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The Corporate Applicant, incorporated in 1996, is engaged in the business of manufacturing steel. Indian Overseas Bank is the Financial Creditor in this matter. The Corporate Applicant had approached the bank for loans, which were granted between 2011 and 2013. The applicant defaulted on payments, leading the bank to issue a demand notice in 2014 under the SARFAESI Act. A previous petition filed by the Corporate Applicant before the NCLT, Chennai, was dismissed because it was filed by 'disqualified Directors'.

## Facts

Marutham Steel Industries Private Limited, a company incorporated on 26.06.1996 and engaged in steel manufacturing, applied for Corporate Insolvency Resolution Process (CIRP) under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016. Indian Overseas Bank is the financial creditor. The company had taken loans from the bank between 29.09.2011 and 30.12.2013, but defaulted on payments. The total debt raised from the bank was Rs. 9,86,00,000/-, with a default amount of Rs. 9,44,76,643/-. The bank issued a demand notice on 26.07.2014 under Section 13(2) of the SARFAESI Act, 2002. The company's operations were irregular, leading to its classification as a Non-Performing Asset (NPA) on 31.03.2014. A previous CIRP application filed on 28.08.2018 was dismissed because

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## Issues and analysis

### Issue 1: Whether the application for initiating Corporate Insolvency Resolution Process under Section 10 of …

**Ratio:** Section 10 of the Insolvency and Bankruptcy Code, 2016 allows a corporate applicant to

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**Reasoning:** The Adjudicating Authority, after reviewing the submissions and records, was satisfied

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**Interpretation:** Section 10 provides a mechanism for a corporate debtor to initiate insolvency

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**Application:** The court applied Section 10 to the facts of the case, noting that the

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** M/s. Marutham…
- **Respondents:** Marutham Steel…; M/s. Indian…

## Timeline

- **1996-06-26 — Company Incor…**: Marutham Steel Industries Private Limited…
- **2011-09-29 — Loan Gra…**: Indian Overseas Bank granted…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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