# In the matter of SRS Ltd. CP (IB) No.201-Chd-Hry-2018

> NCLT judgment dated 2018-08-21. Citation: TCN-2018-NCLT-00910. State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 21 Aug 2018
- **Citation:** TCN-2018-NCLT-00910
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/srs-ltd-cp-ib-no201-chd-hry-2018-59c4829f

## Summary

### Background

State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against SRS Ltd., the corporate debtor, for default in repayment of financial debt. The loan was granted under a consortium arrangement with State Bank of India and its subsidiary banks. The bank sought initiation of the corporate insolvency resolution process due to the default committed by the corporate debtor.

## Facts

State Bank of India (SBI), a public sector bank, filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against SRS Ltd., a company registered under the Companies Act, 1956. SBI, along with its subsidiary banks, granted/enhanced/renewed loans to SRS Ltd. over time, with the last renewal initiated on March 30, 2016. The loan was a consortium arrangement. The first loan sanction was on March 22, 2007. SBI granted a total fund-based limit of ₹50 Crores, including a cash credit of ₹3 Crores and a term loan of ₹47 Crores. Several enhancements of the loan were provided through various sanction letters and credit facilities. Working Capital Consortium Agreements were executed on August 25, 2007, August 2, 2010, and February 1, 2014. The total

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## Issues and analysis

### Issue 1: Whether the application filed by 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 observed that the financial creditor, State Bank of India, had filed the

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

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**Application:** The court found that State Bank of India had complied with the requirements of

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## Parties

- **Judges:** R.P.Nag…; Pradeep R.…
- **Appellants:** State Bank of…
- **Respondents:** SRS L…

## Timeline

- **2007-03-22 — First Sanction…**: State Bank of India and its subsidiaries…
- **2016-03-30 — Last Renewal…**: Last renewal of loan…

## 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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