# In the matter of Shri Tubes & Steels Private Limited C.P. (IB) No. 195-BB-2020

> NCLT judgment dated 2021-03-31. Citation: TCN-2021-NCLT-02516. The case involves an application filed by M/s. Small Industries Development Bank of India…

- **Court:** NCLT
- **Order date:** 31 Mar 2021
- **Citation:** TCN-2021-NCLT-02516
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shri-tubes-steels-private-limited-cp-ib-no-195-bb-2020-00f7fca4

## Summary

### Background

The case involves an application filed by M/s. Small Industries Development Bank of India (SIDBI), the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Shri Tubes & Steels Private Limited, the Corporate Debtor, due to a default of Rs. 29,22,88,404/-. The Financial Creditor had previously initiated CIRP against the Corporate Debtor, which was later withdrawn based on a proposed One-Time Settlement (OTS). However, the Corporate Debtor failed to adhere to the terms of the OTS, leading to the current application.

## Facts

M/s. Small Industries Development Bank of India (SIDBI) filed a petition under Section 7 of the IBC, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Shri Tubes & Steels Private Limited due to a default of Rs. 29,22,88,404/-. SIDBI had previously filed a similar petition (CP (IB) No. 37/BB/2018), which was withdrawn after a One-Time Settlement (OTS) was proposed. The Corporate Debtor failed to adhere to the terms of the OTS, specifically the payment schedule. SIDBI granted an 'in-principle' acceptance to the OTS amount, subject to certain conditions. The Corporate Debtor requested modifications to the OTS terms, including reducing the initial payment. SIDBI agreed to partially modify the terms. The Corporate Debtor failed to make

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## Issues and analysis

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

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

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**Reasoning:** The court found that the Corporate Debtor failed to adhere to the terms of the OTS and

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**Interpretation:** The court interpreted Section 7 of the IBC, 2016, to mean that a financial

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**Application:** The court applied the ratio to the facts of the case, finding that the

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** M/s Small…
- **Respondents:** Tubes & Steels…; M/s.Shri Tubes &…
- **Advocates:** Sharan A K…; Sunil P P…

## Timeline

- **2018-01-29 — First CIRP App…**: Financial Creditor filed CP (IB) No. 37/BB/2018 seeking to initiate CIRP against…
- **2019-01-14 — OTS Offe…**: Corporate Debtor offered a One-Time…

## 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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