# 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-01430. 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-01430
- **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-201-3998387c

## 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 loan 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, starting in 2010. A One Time Settlement (OTS) was proposed in 2017, but the bank alleged that Mir Steel did not make payments as per the terms of the OTS. Mir Steel contended that there was a pre-existing dispute and that the OTS was wrongly revoked. Several civil

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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) under Section 7 of the Insolvency and Bankruptcy Code, 2016. J&K Bank had extended credit facilities to Mir Steel, including term loans and cash credit facilities, starting in 2010. 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. Mir Steel's account became irregular and was declared a Non-Performing Asset (NPA) on 31.03.2016. A recall notice was issued on 20.04.2016. The total outstanding balance as of 30.06.2018 was ₹72,39,61,277.74. A

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiation …

**Ratio:** The ratio is that an application under Section 7 of the IBC is maintainable if a default

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**Reasoning:** The Adjudicating Authority reasoned that the conditions provided under Section 7(5)(a) of

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The Adjudicating Authority applied this ratio to the facts of the case, finding

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## Parties

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

## Timeline

- **2010-01-01 — Loan Facility…**: Mir Steel approached J&K Bank for a term loan facility of ₹8.5 crores and a cash credit…
- **2010-02-26 — Credit Facility…**: The credit facility was sanctioned…

## 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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