# In the matter of Sri Balaji Forest Products Private Limited CP(IB)No.518-KB-2018

> NCLT judgment dated 2019-10-18. Citation: TCN-2019-NCLT-00918. Bank of India, the Financial Creditor, filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 18 Oct 2019
- **Citation:** TCN-2019-NCLT-00918
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sri-balaji-forest-products-private-limited-cpibno518-kb-2018-e4c99735

## Summary

### Background

Bank of India, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Sri Balaji Forest Product Pvt. Ltd., the Corporate Debtor, to initiate the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor allegedly defaulted in paying a financial debt of Rs. 118,52,14,908/-. The Corporate Debtor contended that the proceeding was filed beyond the period of limitation and that a One Time Settlement (OTS) proposal was under consideration by the Bank. The Financial Creditor granted and disbursed various term loans and CC facilities to the Corporate Debtor in 2014, which were increased over time. The Corporate Debtor admitted and acknowledged the debt on 18.12.2015 but failed to repay it.

## Facts

In 2014, Bank of India (Financial Creditor) granted and disbursed term loans and CC facilities to Sri Balaji Forest Products Private Limited (Corporate Debtor). The loan amount was increased over time by extending repayment terms. On 30.03.2013, the term loan was Rs. 255 Lakh and CC facilities were extended to Rs. 3,200 Lakhs. The Corporate Debtor defaulted on the loan. On 18.12.2015, the Corporate Debtor admitted and acknowledged the debt but failed to repay it. The Financial Creditor filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against the Corporate Debtor for a financial debt of Rs. 118,52,14,908/-. The Corporate Debtor contended that the application was filed beyond the period of limitation and that a One Time

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The court reasoned that the Corporate Debtor had committed default in paying the

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**Interpretation:** Section 7 of the IBC, 2016, provides the mechanism for a financial creditor to

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**Application:** The court applied Section 7 of the IBC, 2016, to the facts of the case and

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Bank of…
- **Respondents:** Balaji Forest…
- **Advocates:** Anuj S…; Urmila Chakraborth…; +4 more

## Timeline

- **2014-01-01 — Loan Gra…**: Financial Creditor granted and disbursed term loan and CC facilities to the Corporate…
- **2013-03-30 — Loan Ext…**: Term loan of Rs. 255 Lakh and CC…

## 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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