# In the matter of Sri Ganesh Sponge Iron Pvt. Ltd. IA No. 70-CTB-20l9 Connected with TP No. 26-CTB-20l9 Arising out of CP (IB) No.934-KB-2018

> NCLT judgment dated 2021-07-26. Citation: TCN-2021-NCLT-01620. SREI Equipment Finance Ltd., a financial creditor, filed an application under Section 60(5) of…

- **Court:** NCLT
- **Order date:** 26 Jul 2021
- **Citation:** TCN-2021-NCLT-01620
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sri-ganesh-sponge-iron-pvt-ltd-ia-no-70-ctb-20l9-connected-with-tp-no-26-ctb-20l-96125f7f

## Summary

### Background

SREI Equipment Finance Ltd., a financial creditor, filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, challenging the reduction of its claim by the Resolution Professional (RP) of Sri Ganesh Sponge Iron Pvt. Ltd., a company undergoing Corporate Insolvency Resolution Process (CIRP). SREI claimed Rs. 6,77,07,586, but the RP admitted only Rs. 2,56,34,154, citing excessive overdue charges. SREI argued that the overdue charges were in line with RBI circulars and the loan agreement. The RP contended that the overdue charges were extortionate and relied on the NBFC Fair Practices Code and the Usurious Loan Act, 1918. The applicant sought an order to set aside the RP's decision, restore the full claim, and grant a seat in the Committee of

…

## Facts

SREI Equipment Finance Ltd. (the Applicant) is a financial creditor of Sri Ganesh Sponge Iron Pvt. Ltd. (Corporate Debtor). A loan agreement was executed between SREI and Sri Ganesh Sponge Iron Pvt. Ltd. on June 30, 2012. CIRP was initiated against the Corporate Debtor, and the RP was appointed. SREI filed a claim of Rs. 6,77,07,586, which included overdue charges. The RP admitted only Rs. 2,56,34,154, rejecting the overdue charges. The RP stated in an email dated May 27, 2019, that the overdue charges are extortionate. SREI argued that the charges were in line with RBI circulars. The RP relied on the NBFC Fair Practices Code and the Usurious Loan Act, 1918. The applicant has sold one of the assets under the loan agreement for Rs. 19.00 lakh but not disclosed the same

…

## Issues and analysis

### Issue 1: Whether the Resolution Professional has the adjudicatory power to reduce the claim of a financial …

**Ratio:** A Resolution Professional (RP) does not possess adjudicatory powers to unilaterally

…

**Reasoning:** The NCLT relied on the Supreme Court's decision in 'Swiss Ribbons Pvt. Ltd.& Anr. Vs.

…

**Interpretation:** This means that the RP's role is limited to verifying the claims based on

…

**Application:** In this case, the RP reduced SREI's claim based on the assessment that the

…

## Parties

- **Judges:** Rajasekha…; Satya Ranjan…
- **Appellants:** SREI EQUIPMENT…
- **Respondents:** Ganesh Sponge…; Avishek…

## Timeline

- **1956-01-01 — Companies Ac…**: SREI Equipment Finance Ltd. is…
- **2001-10-10 — Incorporation of…**: Sri Ganesh Sponge Iron…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/sri-ganesh-sponge-iron-pvt-ltd-ia-no-70-ctb-20l9-connected-with-tp-no-26-ctb-20l-96125f7f