# In the matter of Metal Closures Pvt. Ltd. C.P. (IB) No.103-BB-2018

> NCLT judgment dated 2018-12-14. Citation: TCN-2018-NCLT-00076. The case involves an application filed by M/s. State Bank of India, representing a consortium…

- **Court:** NCLT
- **Order date:** 14 Dec 2018
- **Citation:** TCN-2018-NCLT-00076
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/metal-closures-pvt-ltd-cp-ib-no103-bb-2018-6536b0aa

## Summary

### Background

The case involves an application filed by M/s. State Bank of India, representing a consortium of banks, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Metal Closure Pvt. Ltd. The application is based on the corporate debtor's alleged default of Rs. 282,02,71,568.8/-. The corporate debtor has been granted various credit facilities by the consortium of banks. The account of the corporate debtor was classified as NPA on 31.01.2010. The applicant banks have initiated action by filing petition under section 14 of SARFAESI Acts, 2002 on 26.12.2015, 29.12.15 and 29.02.2015 by

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## Facts

M/s. State Bank of India, representing a consortium of banks, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Metal Closure Pvt. Ltd. The application is based on the corporate debtor's alleged default of Rs. 282,02,71,568.8/-. M/s. State Bank of India was incorporated on 01.07.1955. M/s. Metal Closure Pvt. Ltd. was incorporated on 7.12.1977. Its Authorised Share Capital is Rs. 17,00,00,000/- and Paid up Capital is Rs. 15,00,00,000/-. The Corporate Debtor is engaged in manufacturing activities of production of Metal Crown caps, Shoe Polish Containers, Composite Closures, Battery Covers, Plastic Torches etc. The Corporate Debtor was granted various credit

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## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor meets the requirements of Section 7 of the …

**Ratio:** Section 7 of the IBC, 2016, provides the procedure for initiating the Corporate

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**Reasoning:** The Adjudicating Authority must be satisfied that a default has occurred before admitting

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**Interpretation:** The interpretation of Section 7 involves determining whether the financial

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**Application:** In this case, the Adjudicating Authority found that the petitioner banks had

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## Parties

- **Judges:** Rajeswara Rao…; Ashok Kumar…
- **Appellants:** State Bank of…
- **Respondents:** Metal Closure…

## Timeline

- **1955-07-01 — Incorporation…**: M/s. State Bank of…
- **1977-12-07 — Incorporation…**: M/s. Metal Closure Pvt.…

## 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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