# In the matter of Metenere Limited C.P. No. IB-639(PB)-2018

> NCLT judgment dated 2020-10-03. Citation: TCN-2020-NCLT-00474. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 3 Oct 2020
- **Citation:** TCN-2020-NCLT-00474
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/metenere-limited-cp-no-ib-639pb-2018-fad0c3ae

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/s. Metenere Limited, the Corporate Debtor. The Financial Creditor claimed that the Corporate Debtor defaulted in repaying ₹768,68,01,441 as of 14.05.2018. The Corporate Debtor argued against the admission of the petition, citing various reasons including the applicability of RBI circulars declared ultra vires by the Supreme Court, the company's commercial viability, and procedural irregularities.

## Facts

State Bank of India (SBI), acting as the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Metenere Limited, the Corporate Debtor. The Corporate Debtor had availed credit facilities from SBI and other banks in a consortium. As of 14.05.2018, the Corporate Debtor defaulted in repaying ₹768,68,01,441 to the creditor bank. The account of the Corporate Debtor was classified as Non-Performing Asset (NPA) on 28.07.2017. The Corporate Debtor argued that the petition was filed pursuant to an RBI circular dated 12.02.2018, which was later struck down by the Supreme Court in the Dharani Sugars case. The Corporate Debtor also contended that it was

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC is maintainable given the Corporate Debtor's …

**Ratio:** The Supreme Court in Dharani Sugars held that default shall be established as stated

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**Reasoning:** The NCLT reasoned that the Financial Creditor's application was based on the debt and

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**Interpretation:** The interpretation is that the striking down of the RBI circular does not

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**Application:** The NCLT applied this principle by finding that the Financial Creditor had

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## Parties

- **Judges:** SH. B.S.V.…; Sh. Hemant Kumar…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Metenere…

## Timeline

- **2017-07-28 — Account Classified as…**: The account of the Corporate Debtor was classified as Non-Performing Asset (NPA) by the…
- **2018-02-12 — RBI Circula…**: Date of the RBI Circular which was later struck down by the Supreme Court in the Dharani…

## 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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