# In the matter of SBM Paper Mills Private Limited CP-1362-I&BC-NCLT-MB-MAH-2017

> NCLT judgment dated 2017-10-17. Citation: TCN-2017-NCLT-00276. The Petitioner, M/S. SBM Paper Mills Private Limited, filed a petition on 2017-09-04 under…

- **Court:** NCLT
- **Order date:** 17 Oct 2017
- **Citation:** TCN-2017-NCLT-00276
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sbm-paper-mills-private-limited-cp-1362-ibc-nclt-mb-mah-2017-9a6006b2

## Summary

### Background

The Petitioner, M/S. SBM Paper Mills Private Limited, filed a petition on 2017-09-04 under Section 10 of the Insolvency & Bankruptcy Code 2016 to declare itself insolvent. The company was originally incorporated as M/s Seth Bankatlal Malu Industries Pvt. Ltd. on 2000-07-14 and later changed its name to M/s. SBM Paper Mills Pvt. Ltd. effective from 2015-04-27. The company's problems in repayment began in 2016. The application was based on a default in payment to Allahabad Bank, a Financial/Operational Creditor. The computation of default amount to each of Bank's Debt along with the statement of accounts on 2016-09-06.

## Facts

M/S. SBM Paper Mills Private Limited, formerly known as M/s Seth Bankatlal Malu Industries Pvt. Ltd., filed a petition under Section 10 of the Insolvency & Bankruptcy Code, 2016, seeking to declare itself insolvent. The company defaulted on payments to Allahabad Bank, a Financial/Operational Creditor. The default amount was computed as of 2016-09-06. The company's financial difficulties began in 2016. The Corporate Debtor created a mortgage over several immovable properties under a Deed of Mortgage dated 2010-08-13 and a Supplemental Letter of Mortgage dated 2014-09-25. These properties include agricultural land, non-agricultural land, and a residential flat. The company also hypothecated movable assets and pledged shares of the Corporate Debtor. Personal

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## Issues and analysis

### Issue 1: Whether the evidences on record establish a 'Debt' and 'Default' in payment of the outstanding …

**Ratio:** Section 10 of the Insolvency & Bankruptcy Code requires the establishment of a 'Debt'

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**Reasoning:** The Tribunal reviewed the evidences presented and concluded that a 'Debt' existed and

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**Interpretation:** The interpretation of Section 10 necessitates a clear demonstration of both the

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**Application:** In this case, the Tribunal found sufficient evidence of both a 'Debt' and a

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## Parties

- **Judges:** M.K. Sh…; Bhaskara Pantula…
- **Respondents:** M/S. SBM Paper…

## Timeline

- **2000-07-14 — Company Incor…**: The Company was incorporated as M/s Seth…
- **2010-08-13 — Mortgage…**: The Corporate Debtor created a…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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