# In the matter of S S P Sponge Iron Private Limited CP (IB) No. 339-7-HDB-2020

> NCLT judgment dated 2021-01-06. Citation: TCN-2021-NCLT-03380. Mr. Rajoli Venkata Ramana Reddy, a financial creditor, filed a petition to initiate Corporate…

- **Court:** NCLT
- **Order date:** 6 Jan 2021
- **Citation:** TCN-2021-NCLT-03380
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/s-s-p-sponge-iron-private-limited-cp-ib-no-339-7-hdb-2020-1079ebfe

## Summary

### Background

Mr. Rajoli Venkata Ramana Reddy, a financial creditor, filed a petition to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. SSP Sponge Iron Private Limited, the corporate debtor. The petitioner claimed that the corporate debtor owed Rs. 5,27,46,370.04 as of February 28, 2019. The petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency & Bankruptcy (Application to the Adjudicating Authority) Rules, 2016.

## Facts

Mr. Rajoli Venkata Ramana Reddy (Financial Creditor) filed a petition against M/s. SSP Sponge Iron Private Limited (Corporate Debtor) under Section 7 of the IBC, claiming a default of Rs. 5,27,46,370.04 as of 28.02.2019. The Financial Creditor provided loans to the Corporate Debtor based on agreements and promissory notes, with an interest rate of 12% per annum. The Corporate Debtor made part payments of Rs. 85,96,217. The Financial Creditor issued notices for payment, but the Corporate Debtor sought additional time due to market conditions. The Corporate Debtor denied the averments, stating that they made substantial part payments of Rs. 1,30,96,217 by 28.02.2019 and faced financial difficulties. The Financial Creditor filed copies of loan agreements, letters, and

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## Issues and analysis

### Issue 1: Whether the petition filed by the financial creditor under Section 7 of the IBC is maintainable for …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The Adjudicating Authority considered the evidence presented by the financial creditor,

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The Adjudicating Authority found that the financial creditor had established

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## Parties

- **Judges:** K. Anantha…; Veera Brahma Rao…
- **Appellants:** Rajoli Venkata…
- **Respondents:** SSP Sponge Iron…
- **Advocates:** Naresh Kumar…; G. Bhu…

## Timeline

- **2019-02-28 — Date of D…**: The financial creditor claimed that the corporate debtor was due and liable to pay an…
- **2020-12-23 — Hearing…**: The matter was heard by…

## 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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