# In the matter of Raj Rayon Industries Limited C.P.(IB) No. 350-7-NCLT-AHM-2018

> NCLT judgment dated 2020-01-23. Citation: TCN-2020-NCLT-02203. The case involves a petition filed by State Bank of India (SBI) under Section 7 of the…

- **Court:** NCLT
- **Order date:** 23 Jan 2020
- **Citation:** TCN-2020-NCLT-02203
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/raj-rayon-industries-limited-cpib-no-350-7-nclt-ahm-2018-6697c14b

## Summary

### Background

The case involves a petition filed by State Bank of India (SBI) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Raj Rayon Industries Ltd, the Corporate Debtor. SBI, as a financial creditor, claimed that the Corporate Debtor defaulted on its loan repayments. SBI had sanctioned term loans and working capital loans to Raj Rayon Industries Ltd starting from 1999, which were restructured and renewed over time. The Corporate Debtor was classified as a Non-Performing Asset (NPA) on 30.11.2013.

## Facts

State Bank of India (SBI) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Raj Rayon Industries Ltd, the Corporate Debtor. SBI claimed that Raj Rayon Industries Ltd defaulted on loan repayments. SBI had sanctioned term loans and working capital loans to Raj Rayon Industries Ltd starting from 07.04.1999. The outstanding amount, including interest, as of 31.03.2019, was Rs.13320164736 (Principal outstanding amount Rs.6391606199 + interest of Rs.6928558537). These loans were being renewed and restructured from time to time. The Corporate Debtor was classified as NPA on 30.11.2013. The date of default is 30.11.2013. Balance Confirmation letter was issued by the Respondent to the Petitioner on 08.08.2016. The Last transaction is on

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## Issues and analysis

### Issue 1: Whether the petition filed by State Bank of India under Section 7 of the Insolvency and Bankruptcy …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency

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**Reasoning:** The Adjudicating Authority examined the records submitted by SBI, including the Form-1

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**Interpretation:** The completeness of the petition is a prerequisite for its admission under

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**Application:** In this case, the Adjudicating Authority found that SBI had filed all the

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** State Bank of…
- **Respondents:** Raj Rayon…

## Timeline

- **1999-04-07 — Loan San…**: Petitioner Bank sanctioned Term Loan and…
- **2013-11-30 — NPA Classif…**: The Corporate Debtor was classified…

## 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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