# In the matter of Siddharth Milk & Milk Products Pvt. Ltd. CP No. 3508-IBC-NCLT-MB-MAH-2018

> NCLT judgment dated 2019-04-26. Citation: TCN-2019-NCLT-03687. The case pertains to an application filed by Suraksha Asset Reconstruction Pvt. Ltd. (Financial…

- **Court:** NCLT
- **Order date:** 26 Apr 2019
- **Citation:** TCN-2019-NCLT-03687
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/siddharth-milk-milk-products-pvt-ltd-cp-no-3508-ibc-nclt-mb-mah-2018-2be40a01

## Summary

### Background

The case pertains to an application filed by Suraksha Asset Reconstruction Pvt. Ltd. (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Siddharth Milk & Milk Products Pvt. Ltd. (Corporate Debtor) for initiation of the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed default on a debt of ₹1,47,81,04,252/-. The State Bank of India (Assignor) had originally granted loan facilities to the Corporate Debtor, which were later assigned to the Financial Creditor. The Corporate Debtor's account was declared NPA, and SARFAESI proceedings were initiated but remained pending. The Corporate Debtor failed to appear before the NCLT despite multiple notices.

## Facts

The State Bank of India (SBI) granted loan facilities to Siddharth Milk & Milk Products Pvt. Ltd. (Corporate Debtor), including a Fund Based Facility of ₹220 Lakhs, a Non-Fund Based Facility of ₹15 Lakhs, and a Standby Letter of Credit of ₹6 Lakhs. These facilities were secured by equitable mortgages, hypothecation of assets, and personal guarantees. The Corporate Debtor defaulted on repayment, leading SBI to declare the account as NPA on 2012-01-28 and initiate SARFAESI proceedings. SBI assigned the debts to Suraksha Asset Reconstruction Pvt. Ltd. (Financial Creditor) on 2018-03-31. The Financial Creditor filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, claiming a default of ₹1,47,81,04,252/- as of 2018-08-31. The Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has established the existence of a financial debt and default by the …

**Ratio:** The establishment of a financial debt and default is a prerequisite for admitting a

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**Reasoning:** The NCLT relied on the loan documents, assignment agreement, and bank statements provided

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**Interpretation:** The term 'financial debt' is interpreted broadly to include any debt along with

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**Application:** In this case, the Financial Creditor presented evidence of loan agreements,

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## Parties

- **Judges:** Mr V. P.…; Mr Ravikumar…
- **Appellants:** Suraksha Asset…
- **Respondents:** Siddharth Milk &…

## Timeline

- **2012-01-28 — Account Decla…**: State Bank of India declared the Corporate…
- **2013-12-06 — Demand Notice…**: State Bank of India issued a demand notice…

## 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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