# In the matter of MSP Metallics Limited CP (IB) No. 580-KB-2020

> NCLT judgment dated 2021-11-25. Citation: TCN-2021-NCLT-00408. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 25 Nov 2021
- **Citation:** TCN-2021-NCLT-00408
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/msp-metallics-limited-cp-ib-no-580-kb-2020-6ad5a310

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, initially by Central Bank of India against MSP Metallics Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). Central Bank of India was later substituted by CFM Asset Reconstruction Private Limited as the Financial Creditor. The Corporate Debtor, MSP Metallics Limited, was incorporated on 29.11.1996.

## Facts

Central Bank of India granted term loan and working capital facilities to MSP Metallics Limited, which were restructured under a Master Restructuring Agreement (MRA) dated 30.03.2015. Under the MRA, the Financial Creditor provided several facilities, including Facility A1 (Existing Term Loan of Rs.12,80,00,000), Facility A2 (Working Capital Term Loan-I of Rs.10,15,00,000), Facility A4 (Funded Interest Term Loan of Rs.5,89,00,000), and Facility D (Fund based working capital facilities of Rs.15,78,00,000). The Corporate Debtor defaulted on payments, with the date of default being 29.10.2015, and the account was classified as NPA on 29.01.2016. The total outstanding amount included Rs. 19.74Crore under CBI Facility 1, Rs.15.61Crore under CBI Facility 2, Rs.6.17Crore,

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The court observed that the Financial Creditor had provided sufficient evidence to

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

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**Application:** The court applied Section 7 of the IBC to the facts of the case, finding that

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Respondents:** MSP Metallics…

## Timeline

- **1996-11-29 — Incorporation of…**: MSP Metallics Limited…
- **2015-03-30 — Master Restructuring…**: Central Bank of India and MSP Metallics Limited entered into a Master Restructuring…

## 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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