# In the matter of Sri Maharaja Oil Imports and Exports India Pvt. Ltd. CP-531-(IB)-CB-2017

> NCLT judgment dated 2017-08-04. Citation: TCN-2017-NCLT-00661. The case involves an application filed by the State Bank of India (Financial Creditor) under…

- **Court:** NCLT
- **Order date:** 4 Aug 2017
- **Citation:** TCN-2017-NCLT-00661
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sri-maharaja-oil-imports-and-exports-india-pvt-ltd-cp-531-ib-cb-2017-ae91461d

## Summary

### Background

The case involves an application filed by the State Bank of India (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, against Sri Maharaja Oil Imports & Exports India Pvt Ltd (Corporate Debtor). The Financial Creditor claimed a default in payment of a loan advanced to the Corporate Debtor.

## Facts

State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) against Sri Maharaja Oil Imports & Exports India Pvt Ltd, claiming to be a financial creditor. The amount claimed was Rs. 68,65,95,202.75 as of June 18, 2017. SBI stated that the money was advanced as a loan to the Corporate Debtor, who defaulted on payments. The Director's report indicated that the company incurred a loss of Rs. 362.60 Lakhs against a profit of Rs. 14.96 Lakhs in the previous year, leading to the cessation of business operations. The Corporate Debtor acknowledged the debt in a letter. A demand notice was also issued to the Corporate Debtor, who replied via letter dated 11.06.2017. The demand notice was dated 01.03.2017 under Section 13(2) of

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## Issues and analysis

### Issue 1: Whether the application filed by the State Bank of India 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 ascertained that the Corporate Debtor defaulted on its payment obligations to

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

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**Application:** The court applied Section 7 to the facts of the case, noting that the State

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## Parties

- **Judges:** CH. MOHD SHARIEF…; S. VIJAYARA…
- **Appellants:** State Bank of…
- **Respondents:** Maharaja Oil…
- **Advocates:** P.Elayakin…; V.M. KA…; +3 more

## Timeline

- **2017-03-01 — Demand N…**: Demand Notice issued to the Corporate Debtor under Section 13(2) of the SARFAESI Act,…
- **2017-06-11 — Corporate Debto…**: The Corporate Debtor replied to…

## 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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