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

> NCLT judgment dated 2021-11-25. Citation: TCN-2021-NCLT-00420. 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-00420
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/msp-metallics-limited-cp-ib-no-580-kb-2020-c4a08c16

## 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 was incorporated on 29.11.1996. The petition was filed due to the Corporate Debtor's failure to make payments against various credit facilities.

## 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, leading to a total outstanding amount of Rs. 19.74Crore under CBI Facility 1, Rs.15.61Crore under CBI Facility 2, Rs.6.17Crore, Rs.26.49Crore under CBI Facility 5 as on 10.01.2020. The date of default is 29.10.2015 and the

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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:** The petition under Section 7 is maintainable if the Corporate Debtor is in default of a

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

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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 court applied this ratio to the facts by examining the evidence presented

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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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