# In the matter of Ramkar Steel Rerolling Private Limited CP-1176-IB-2018

> NCLT judgment dated 2019-02-06. Citation: TCN-2019-NCLT-04984. The case involves an application filed by Indian Bank, the Financial Creditor, under Section 7…

- **Court:** NCLT
- **Order date:** 6 Feb 2019
- **Citation:** TCN-2019-NCLT-04984
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ramkar-steel-rerolling-private-limited-cp-1176-ib-2018-5cc52c46

## Summary

### Background

The case involves an application filed by Indian Bank, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Ramkar Steel Re-Rolling Private Limited, the Corporate Debtor. The application seeks to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare a moratorium, and appoint an Interim Resolution Professional (IRP). The Corporate Debtor failed to pay an outstanding amount of Rs. 60,24,554.32 as of 25.09.2018.

## Facts

Indian Bank, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Ramkar Steel Re-Rolling Private Limited, the Corporate Debtor. The Financial Creditor claimed an outstanding amount of Rs. 60,24,554.32 as of 25.09.2018. The Financial Creditor had sanctioned Open Cash Credit and IND SME Term Loan facilities to the Corporate Debtor on 20.06.2009, totaling Rs. 53,00,000. The Corporate Debtor executed various documents, including a Demand Promissory Note and agreements for hypothecation and open cash credit. The loan account of the Corporate Debtor was classified as NPA on 30.09.2015. The Financial Creditor initiated SARFAESI proceedings and issued a demand notice. The Corporate Debtor admitted to availing

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## Issues and analysis

### Issue 1: Whether the application 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 found that the Financial Creditor had provided sufficient evidence of default

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial creditor

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**Application:** The court applied Section 7 to the facts of the case, noting that the Financial

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## Parties

- **Judges:** Ch. Mohd Sharief…
- **Appellants:** Indian…
- **Respondents:** M/s. Ramkar Steel…

## Timeline

- **2009-06-20 — Sanction of Credit…**: Financial Creditor sanctioned Open Cash Credit and IND SME Term Loan facilities to the…
- **2015-09-30 — Classificatio…**: The loan account of the Corporate Debtor was…

## 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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