# In the matter of SPS Steels Rolling Mills Limited. CP (IB) No. 595-KB-2017

> NCLT judgment dated 2017-12-22. Citation: TCN-2017-NCLT-00015. Allahabad Bank, a financial creditor, filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 22 Dec 2017
- **Citation:** TCN-2017-NCLT-00015
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sps-steels-rolling-mills-limited-cp-ib-no-595-kb-2017-0c61b74b

## Summary

### Background

Allahabad Bank, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against SPS Steels Rolling Mills Limited, the corporate debtor, alleging default on repayment of credit facilities. The corporate debtor contested the application, claiming abuse of process and compliance with a one-time settlement (OTS). The financial creditor argued that the corporate debtor defaulted on its obligations, leading to its account being declared a Non-Performing Asset (NPA). The application was filed before the National Company Law Tribunal (NCLT), Kolkata Bench.

## Facts

Allahabad Bank, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against SPS Steels Rolling Mills Limited, a corporate debtor. The financial creditor claimed that the corporate debtor defaulted on repayment of credit facilities, including term loans and cash credit, with an outstanding amount of Rs. 1,91,59,49,081.41 as of 31.10.2017. The corporate debtor's account was declared a Non-Performing Asset (NPA) on 31.05.2013. The corporate debtor argued that the application was an abuse of process, citing a one-time settlement (OTS) agreement and a civil suit filed against the financial creditor. The financial creditor contended that the OTS was not finalized and that the civil suit was not relevant to the adjudication

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## Issues and analysis

### Issue 1: Whether the application filed by Allahabad Bank under Section 7 of the Insolvency and Bankruptcy …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The NCLT found that the application filed by Allahabad Bank was complete in all respects

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**Interpretation:** Section 7 provides the mechanism for financial creditors to trigger the

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**Application:** The NCLT applied Section 7 to the facts of the case and found that Allahabad

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## Parties

- **Judges:** V. P. S…; Jinan…
- **Appellants:** Allahabad…
- **Respondents:** SPS Steels…

## Timeline

- **1970-01-01 — Banking Compa…**: Allahabad Bank is constituted under the Banking Companies (Acquisition and Transfer of…
- **2006-05-03 — Term Loan San…**: Allahabad Bank granted a term loan of Rs.24…

## 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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