# In the matter of Mir Steel Rolling Mills Private Limited IA No. 68-2020 in CP (IB) No. 274-CHD-J&K-2018

> NCLT judgment dated 2020-03-20. Citation: TCN-2020-NCLT-01423. Jammu & Kashmir Bank Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 20 Mar 2020
- **Citation:** TCN-2020-NCLT-01423
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mir-steel-rolling-mills-private-limited-ia-no-68-2020-in-cp-ib-no-274-chd-jk-201-1b214b75

## Summary

### Background

Jammu & Kashmir Bank Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Mir Steel Rolling Mills Private Limited. The bank claimed that Mir Steel had defaulted on its financial obligations. The application was filed due to the account of Mir Steel becoming irregular and declared as NPA on 31.03.2016. The bank had granted credit facilities to Mir Steel, including term loans and cash credit facilities, but Mir Steel failed to make payments. Mir Steel contended that there was no default because the dispute was to be settled by way of a One Time Settlement (OTS) dated 05.08.2017, but they failed to show payments were made as per the OTS terms. Mir Steel also

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## Facts

Jammu & Kashmir Bank Ltd. (J&K Bank) filed an application to initiate Corporate Insolvency Resolution Process (CIRP) against Mir Steel Rolling Mills Private Limited (Mir Steel) due to a default in financial obligations. In 2010, Mir Steel approached J&K Bank for a term loan of ₹8.5 crores and a cash credit facility of ₹5.14 crores. The credit facility was sanctioned on 26.02.2010 and disbursed on 30.03.2010. An additional term loan of ₹5.4 crores was sanctioned on 11.11.2010. The cash credit facility was enhanced to ₹24 crores and later reduced to ₹20.00 crores. In September 2014, Jammu & Kashmir experienced devastating floods, leading J&K Bank to formulate a rehabilitation scheme under which Mir Steel availed a fresh working capital term loan of

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## Issues and analysis

### Issue 1: Whether the conditions for initiating Corporate Insolvency Resolution Process (CIRP) under Section …

**Ratio:** Section 7(5)(a) of the Insolvency and Bankruptcy Code, 2016, stipulates that the

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**Reasoning:** The court reasoned that the occurrence of default was well-proved, as the J&K Bank

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**Interpretation:** Section 7 of the IBC provides the mechanism for a financial creditor to

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**Application:** In this case, the court found that a default had occurred because Mir Steel's

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## Parties

- **Judges:** Ajay Kumar…; Pradeep R.…
- **Appellants:** Jammu & Kashmir…
- **Respondents:** Mir Steel Rolling…

## Timeline

- **2010-02-26 — Credit Facility…**: J&K Bank sanctioned a term loan and…
- **2010-03-30 — Credit Facility…**: J&K Bank disbursed the term loan and…

## 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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