# In the matter of Shreem Spa & Resorts Private Limited C.P. No. (IB) 550-7-NCLT-AHM-2018

> NCLT judgment dated 2019-09-23. Citation: TCN-2019-NCLT-01305. The case pertains to a joint petition filed by Central Bank of India and State Bank of India…

- **Court:** NCLT
- **Order date:** 23 Sept 2019
- **Citation:** TCN-2019-NCLT-01305
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shreem-spa-resorts-private-limited-cp-no-ib-550-7-nclt-ahm-2018-63f2f009

## Summary

### Background

The case pertains to a joint petition filed by Central Bank of India and State Bank of India under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Shreem Spa & Resorts Private Limited. The financial creditors sought initiation of the Corporate Insolvency Resolution Process (CIRP) due to the corporate debtor's failure to repay its dues. The corporate debtor had been sanctioned term loans and cash credit facilities in 2012. The account was classified as NPA on 30.09.2015, and subsequent actions were taken under the SARFAESI Act. The financial creditors had also filed an original application before DRT-1 at Ahmedabad for recovery of dues. The corporate debtor acknowledged the debt in letters to the applicant banks.

## Facts

Central Bank of India and State Bank of India (erstwhile State Bank of Bikaner and Jaipur) jointly filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Shreem Spa & Resorts Private Limited. The corporate debtor had been sanctioned term loans and cash credit facilities in 2012. The account of the corporate debtor was classified as NPA on 30.09.2015. The financial creditors initiated actions under the SARFAESI Act and also filed an original application before DRT-1 at Ahmedabad for recovery of dues. The corporate debtor acknowledged the debt in letters dated 02.02.2016 and 17.02.2016. The total amount due to the financial creditors was Rs. 109,10,68,480.00 as of 30.09.2015, including interest and penal interest. The applicant

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed default in …

**Ratio:** The existence of a financial debt and default in its repayment are prerequisites for

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**Reasoning:** The Adjudicating Authority perused the documents placed on record by the applicant banks,

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**Interpretation:** Section 7 of the IBC requires the Adjudicating Authority to be satisfied that a

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**Application:** In this case, the documents produced by the financial creditors clearly

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Central Bank of…
- **Respondents:** Shreem Spa &…; Shreem Spa &…

## Timeline

- **2012-01-01 — Sanction of…**: Applicant banks sanctioned cash credit limit…
- **2015-09-30 — Account Classified as…**: The account of the corporate…

## 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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