# In the matter of Scorodite Stainless (India) Pvt. Ltd. CP No. 3290-IBC-NCLT-MAH-2018

> NCLT judgment dated 2019-07-16. Citation: TCN-2019-NCLT-02506. Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 16 Jul 2019
- **Citation:** TCN-2019-NCLT-02506
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/scorodite-stainless-india-pvt-ltd-cp-no-3290-ibc-nclt-mah-2018-35c247cc

## Summary

### Background

Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Scorodite Stainless (India) Pvt. Ltd., claiming default on a financial debt. The Financial Creditor had granted various financial facilities to the Corporate Debtor amounting to ₹43.81 Crores. The Corporate Debtor's loan account was declared NPA on 30.06.2017, with the date of default also being 30.06.2017. The Financial Creditor issued a demand notice on 23rd May 2018, but the Corporate Debtor failed to rectify the default. Consequently, SARFAESI proceedings were initiated. The Corporate Debtor challenged the maintainability of the petition, citing issues with the authority of the person filing the petition and questioning the amount claimed.

## Facts

Bank of India extended financial facilities totaling ₹43.81 Crores to Scorodite Stainless (India) Pvt. Ltd. under Term Loan and Credit Facility Agreements, both dated 15.04.2014. These loans were secured by a Deed of Guarantee and a Supplemental Deed of Loan & Hypothecation, both dated 15.04.2014, covering tangible movable property, plant, stocks, raw materials, and receivables. The Corporate Debtor's loan account was classified as NPA on 30.06.2017, which is also the date of default. A demand notice was issued on 23rd May 2018, recalling ₹33,90,87,996 plus interest. SARFAESI proceedings were initiated, and possession of mortgaged properties was taken. The Corporate Debtor acknowledged the debt in writing, with the last acknowledgement dated 15.10.2016 for

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## Issues and analysis

### Issue 1: Whether Mr. Harshad Parmar had the authority to file the petition on behalf of the Financial …

**Ratio:** An officer authorized to grant a loan also has the authority to initiate insolvency

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**Reasoning:** The NCLT relied on the NCLAT judgment, which clarified that if an officer is authorized

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**Interpretation:** The NCLAT judgment clarifies that the authority to initiate insolvency

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**Application:** Mr. Harshad Parmar had a General Power of Attorney and a Letter of

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## Parties

- **Judges:** V. P. S…; RavikumarDu…
- **Appellants:** Bank of…
- **Respondents:** Scorodite…
- **Advocates:** Nishit D…; Prakash S…; +3 more

## Timeline

- **2014-04-15 — Term Loan Agreement and Credit Facility…**: Bank of India granted financial facilities to Scorodite Stainless (India) Pvt. Ltd. vide…
- **2014-04-15 — Deed of Guarantee and…**: Loan facilities secured by Deed of Guarantee and Supplemental Deed of Loan &…

## 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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