# In the matter of Musaddilal Jewellers Private Limited CP (IB) No. 356-7-HDB-2020

> NCLT judgment dated 2021-01-07. Citation: TCN-2021-NCLT-03371. The case involves an application filed by State Bank of India (Financial Creditor) against M/s.…

- **Court:** NCLT
- **Order date:** 7 Jan 2021
- **Citation:** TCN-2021-NCLT-03371
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/musaddilal-jewellers-private-limited-cp-ib-no-356-7-hdb-2020-a54ae591

## Summary

### Background

The case involves an application filed by State Bank of India (Financial Creditor) against M/s. Musaddilal Jewellers Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor claims that the Corporate Debtor has defaulted on a debt of Rs. 75,15,04,614.95 as of 31.08.2020. The Corporate Debtor has contested the application, citing various issues including demonetization, implication in criminal cases, and the seizure of its assets by the Enforcement Directorate.

## Facts

State Bank of India (SBI), the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against M/s. Musaddilal Jewellers Private Limited, the Corporate Debtor, claiming a default of Rs. 75,15,04,614.95 as of 31.08.2020. The debt includes both principal and interest. The date of default was 21.05.2019, and the account was classified as NPA w.e.f. 29.05.2019. SBI provided documents including charge certificates, sanction letters, and loan agreements to prove the existence of the financial debt. The Corporate Debtor contested the application, stating that the petition was not maintainable due to ongoing proceedings under SAFEMA, FEMA, PMLA, NDPS & PBPT Act, and that the Financial Creditor had initiated SARFAESI

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## Issues and analysis

### Issue 1: Whether the present Company Petition against the Corporate Debtor is maintainable under Section 7 …

**Ratio:** The pendency of actions under the SARFAESI Act or actions under the Recovery of Debts due

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**Reasoning:** The Adjudicating Authority relied on the submissions of the Financial Creditor and the

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**Interpretation:** Section 7 of the I&B Code, 2016, allows a financial creditor to initiate

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**Application:** Despite the Corporate Debtor's arguments regarding the pendency of other

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## Parties

- **Judges:** Shri. K. Anantha…; BINOD KUMAR…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Musaddilal…

## Timeline

- **2016-11-08 — Demonetization…**: The Government of India announced demonetization, which the Corporate Debtor claims…
- **2016-12-07 — Complaint…**: Deputy Director of Income Tax filed a complaint against the Corporate Debtor alleging…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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