# In the matter of Sri Sai Sindhu Industries Limited C.P (IB) No. 133-7-HDB-2020

> NCLT judgment dated 2020-07-24. Citation: TCN-2020-NCLT-00976. The case involves a petition filed by Mr. Gongal Reddy Seshareddy (Financial Creditor) against…

- **Court:** NCLT
- **Order date:** 24 Jul 2020
- **Citation:** TCN-2020-NCLT-00976
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sri-sai-sindhu-industries-limited-cp-ib-no-133-7-hdb-2020-24034547

## Summary

### Background

The case involves a petition filed by Mr. Gongal Reddy Seshareddy (Financial Creditor) against M/s Sri Sai Sindhu Industries Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor claims that the Corporate Debtor defaulted in repaying a sum of Rs. 60,00,000/- along with interest of Rs. 62,40,000/-, totaling Rs. 1,22,40,000/-. The Corporate Debtor acknowledged the loan and issued promissory notes, which were renewed periodically. The Corporate Debtor requested extensions and waivers of interest due to financial difficulties, but the Financial Creditor ultimately filed the petition for initiation of Corporate Insolvency Resolution Process (CIRP).

## Facts

Mr. Gongal Reddy Seshareddy (Financial Creditor) extended a loan of Rs. 60,00,000/- to M/s Sri Sai Sindhu Industries Limited (Corporate Debtor) under a loan agreement dated 2011-05-30, with an interest rate of 12% per annum. The Corporate Debtor issued promissory notes for the loan, which were renewed periodically. The Corporate Debtor failed to repay the loan and interest, leading to a total outstanding amount of Rs. 1,22,40,000/-. The Financial Creditor issued notices for payment, but the Corporate Debtor requested extensions and waivers of interest due to financial difficulties. The Corporate Debtor acknowledged the loan and default but cited a downturn in its business as the reason for non-payment. The Financial Creditor filed a petition under Section 7 of the

…

## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repaying …

**Ratio:** A default occurs when a debtor fails to repay

…

**Reasoning:** The Corporate Debtor acknowledged the loan agreement, the issuance of promissory notes,

…

**Interpretation:** The legal principle is that a default is established when the debtor fails to

…

**Application:** In this case, the Corporate Debtor's acknowledgment of the debt and failure to

…

## Parties

- **Judges:** Ratakonda…; Veera Brahma Rao…; +1 more
- **Appellants:** Gongal Reddy…
- **Respondents:** Sai Sindhu…

## Timeline

- **2011-05-30 — Loan Agre…**: Loan agreement executed between Mr. Gongal Reddy Seshareddy and Sri Sai Sindhu Industries…
- **2011-06-03 — Loan Disb…**: Financial Creditor informed the Corporate Debtor that Rs. 60 lakhs was transferred to the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

---

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-sai-sindhu-industries-limited-cp-ib-no-133-7-hdb-2020-24034547