# In the matter of Shreebhav Polyweaves Pvt. Ltd. C.P. (IB) 385-NCLT-AHM-2020

> NCLT judgment dated 2021-08-31. Citation: TCN-2021-NCLT-01247. The State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 31 Aug 2021
- **Citation:** TCN-2021-NCLT-01247
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shreebhav-polyweaves-pvt-ltd-cp-ib-385-nclt-ahm-2020-9ad5b095

## Summary

### Background

The State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Shreebhav Polyweaves Pvt. Ltd. The financial creditor claimed a default amount of Rs. 25,21,71,006.79/-, with the date of default being 08.12.2018, leading to the account being declared NPA on 09.03.2019. The respondent raised objections regarding the authorization of the person who filed the application and non-compliance with procedural requirements, specifically the service of a copy of the application to the IBBI.

## Facts

State Bank of India (SBI), the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Shreebhav Polyweaves Pvt. Ltd., the corporate debtor. The amount of default was stated as Rs. 25,21,71,006.79/-. The date of default was 08.12.2018, leading to the account being declared a Non-Performing Asset (NPA) on 09.03.2019. The corporate debtor argued that the person who filed the application was not authorized and that a copy of the application was not served to the IBBI, violating Rule 4(3) of the (Application to Adjudicating Authority) Rules, 2016. SBI countered that the person was authorized as per a Gazette notification dated 02.05.1987. The NCLT found

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is …

**Ratio:** An application under Section 7 of the IBC is maintainable if there is a debt and a

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**Reasoning:** The NCLT reasoned that there was a debt due, both in law and in fact, and the applicant

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

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**Application:** The NCLT found that the debt and default were established, and the applicant

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** State Bank of…
- **Respondents:** Shreebhav…

## Timeline

- **2018-12-08 — Date of D…**: The date on which the default occurred,…
- **2019-03-09 — Account Decla…**: The date on which the account of Shreebhav Polyweaves Pvt. Ltd. was declared 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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