# In the matter of Rashi Steel & Power Limited IA No. 78-CTB-2019 Connected with TP No. 197-CTB-2019 in Arising out of CP (IB) No.4707-MB-2018

> NCLT judgment dated 2020-03-02. Citation: TCN-2020-NCLT-01723. The case involves an application filed by Rashi Steel & Power Limited, the Corporate Debtor,…

- **Court:** NCLT
- **Order date:** 2 Mar 2020
- **Citation:** TCN-2020-NCLT-01723
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rashi-steel-power-limited-ia-no-78-ctb-2019-connected-with-tp-no-197-ctb-2019-in-f05c8209

## Summary

### Background

The case involves an application filed by Rashi Steel & Power Limited, the Corporate Debtor, under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), 2016, seeking dismissal of insolvency proceedings initiated by Punjab National Bank (PNB), the Financial Creditor, under Section 7 of the IBC. PNB claimed the Corporate Debtor defaulted on a financial debt of Rs. 141,66,79,953.83 as of 17.12.2018. The Corporate Debtor argued that the proceedings were initiated based on an RBI Circular that was later quashed by the Supreme Court in the Dharani Sugars case.

## Facts

Rashi Steel & Power Limited (Corporate Debtor) availed term loan and cash credit facilities from Punjab National Bank (PNB) (Financial Creditor) under sanction letters dated 24.12.2012 and 29.10.2013. Similar facilities were also extended by Allahabad Bank. The Corporate Debtor proposed restructuring on 24.11.2016, including a request for a fresh term loan. A consortium meeting on 28.11.2016 resolved that PNB would appoint an agency for Techno Economic Viability (TEV) study. A TEV expert was appointed, and a restructuring package was accepted on 27.03.2017, subject to approval. The Corporate Debtor paid an installment in March 2017. The Financial Creditor informed the Corporate Debtor on 21.12.2017 that the restructuring package was under consideration. The Reserve

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## Issues and analysis

### Issue 1: Whether the insolvency proceedings initiated by the Financial Creditor against the Corporate Debtor …

**Ratio:** The ratio is that insolvency proceedings can be initiated based on a default in repayment

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**Reasoning:** The court reasoned that the Financial Creditor presented evidence showing that the

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**Interpretation:** This issue involves interpreting the impact of the Supreme Court's decision in

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**Application:** The court applied the ratio by examining the facts and evidence presented by

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## Parties

- **Judges:** Sucharit…; Satya Ranjan…
- **Respondents:** Rashi Steel &…; Punjab National…
- **Advocates:** Manoj M…

## Timeline

- **2012-12-24 — Sanction…**: Punjab National Bank issued a sanction letter for term loan and cash credit facilities to…
- **2013-10-29 — Sanction…**: Punjab National Bank issued another sanction letter for term loan and cash credit…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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