# in the matter of Radheshyam Fibers Private Ltd. CP (IB) No. 51-7-AHM-2017

> NCLT judgment dated 2017-08-07. Citation: TCN-2017-NCLT-00653. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 7 Aug 2017
- **Citation:** TCN-2017-NCLT-00653
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/radheshyam-fibers-private-ltd-cp-ib-no-51-7-ahm-2017-960f1418

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Radheshyam Fibers Private Limited to initiate the Insolvency Resolution Process. The application was based on the corporate debtor's failure to repay its debts. Radheshyam Fibers Private Limited had availed credit facilities from State Bank of India at various times between 2008 and 2013, including cash credit and standby line of credit. The corporate debtor defaulted on its repayment obligations, leading to the bank initiating recovery proceedings.

## Facts

State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Radheshyam Fibers Private Limited. Radheshyam Fibers Private Limited is a private limited company incorporated under the Companies Act, 1956. SBI had extended various credit facilities to Radheshyam Fibers Private Limited between 2008 and 2013, including cash credit and standby line of credit. The facilities were secured by mortgages and guarantees. The Corporate Debtor defaulted on its repayment obligations, leading SBI to issue a notice dated 29.6.2016 and file an Original Application No. 575 of 2016 before the Debt Recovery Tribunal-II, Ahmedabad. SBI also issued a notice under Section

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## Issues and analysis

### Issue 1: Whether the copy of the application served on the Corporate Debtor is valid and in compliance with …

**Ratio:** Rule 4(3) of the Adjudication Rules requires the Applicant to despatch a valid copy of

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**Reasoning:** The Corporate Debtor argued that the copy of the Application served on them was a draft

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**Interpretation:** The Adjudicating Authority interpreted Rule 4(3) to require substantial

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**Application:** The Adjudicating Authority held that there was substantial compliance with Rule

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** State Bank of…
- **Respondents:** Radheshyam Fibres…

## Timeline

- **2008-01-01 — Corporate Debtor…**: Corporate Debtor approached the Applicant Bank at different points of time, i.e., 2008,…
- **2008-10-30 — Sanction…**: Sanction Letter dated 30.10.2008 for…

## 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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