# In the matter of Shree Vindhya Cast Coaters Ltd. CP(IB) 2045 (MB)-2018

> NCLT judgment dated 2019-05-31. Citation: TCN-2019-NCLT-03113. The case involves a petition filed by Stressed Assets Stabilisation Fund (SASF) under Section 7…

- **Court:** NCLT
- **Order date:** 31 May 2019
- **Citation:** TCN-2019-NCLT-03113
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shree-vindhya-cast-coaters-ltd-cpib-2045-mb-2018-9e7e14a4

## Summary

### Background

The case involves a petition filed by Stressed Assets Stabilisation Fund (SASF) under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Shree Vindhya Cast Coaters Ltd due to non-payment of a financial debt. The debt was originally granted by IDBI and later transferred to SASF. The corporate debtor's account was classified as a Non-Performing Asset (NPA) in 2000. Despite multiple opportunities and settlement proposals, the corporate debtor failed to settle the outstanding amounts.

## Facts

On August 16, 1996, a loan agreement was executed between Shree Vindhya Cast Coaters Ltd (Corporate Debtor) and IDBI, granting a loan of Rs. 6,00,00,000. A guarantee agreement was also executed by Shree Vindhya Paper Mills Limited. The loan was secured by a charge over immovable properties. The Corporate Debtor's account was categorized as an NPA on March 29, 2000, due to default in repayment. IDBI issued a recall notice on April 17, 2002, and a corporate guarantee invocation letter on May 23, 2002. Shree Vindhya Paper Mills Limited proposed a one-time settlement on May 3, 2007, which was later modified. On May 21, 2009, the Financial Creditor withdrew the settlement package due to persistent breach of conditions. A statutory notice under Section 13(2) of the SARFAESI

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor under Section 7 of the IBC, 2016, for …

**Ratio:** Section 7 of the IBC, 2016 allows a financial creditor to initiate CIRP against a

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**Reasoning:** The court noted that the Corporate Debtor failed to appear before the tribunal on several

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**Interpretation:** Section 7 of the IBC, 2016, provides the mechanism for a financial creditor to

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**Application:** In this case, the court found that the Corporate Debtor had defaulted on its

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## Parties

- **Judges:** V. P. S…; RavikumarDu…
- **Appellants:** Stressed Assets…
- **Respondents:** Shree Vindhya…

## Timeline

- **1996-08-16 — Loan Agreement…**: A loan agreement was executed between the…
- **1996-08-16 — Guarantee Agreement…**: Shree Vindhya Paper Mills Limited executed a…

## 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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