# In the matter of State Bank of India Vs Adhunik Metaliks Ltd & Zion Steel Limited TA No. 29-CTB-2019 & TP No. 44-CTB-2019 in CP (IB) No. 372 & 373-KB-2017

> NCLT judgment dated 2019-07-09. Citation: TCN-2019-NCLT-02603. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 9 Jul 2019
- **Citation:** TCN-2019-NCLT-02603
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/state-bank-of-india-vs-adhunik-metaliks-ltd-zion-steel-limited-ta-no-29-ctb-2019-7e2fbbc3

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Adhunik Metaliks Limited and Zion Steel Limited, citing a default of over Rs. 7,477,200,000. The Adjudicating Authority at Kolkata admitted both companies into the Corporate Insolvency Resolution Process (CIRP) on 03.08.2017, appointing Mr. Sumit Binani as the Interim Resolution Professional, later confirmed as the Resolution Professional. Liberty House Group submitted a Resolution Plan, which was approved by the Committee of Creditors (CoC) with 99.94% votes and subsequently approved by the Adjudicating Authority on 17.07.2018. However, MSTC Limited's claim for Rs. 108.36 Crore was rejected. MSTC filed appeals, which were dismissed by NCLAT and the Supreme

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## Facts

State Bank of India initiated CIRP against Adhunik Metaliks Limited and Zion Steel Limited under Section 7 of IBC due to a default exceeding Rs. 7,477,200,000. The CIRP was admitted on 03.08.2017, and Sumit Binani was appointed as the Resolution Professional. Liberty House Group's Resolution Plan was approved by the CoC with 99.94% votes and by the Adjudicating Authority on 17.07.2018. MSTC Limited's claim of Rs. 108.36 Crore was rejected, and their subsequent appeals were dismissed. Liberty House Group failed to implement the Resolution Plan, specifically failing to make an upfront payment of Rs. 410 Crore within 57 days as required. Liberty House Group argued that the CoC did not issue offer letters for equity shares, hindering their ability to invest funds. The CoC

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## Issues and analysis

### Issue 1: Whether the delay in implementing the Resolution Plan was attributable to Liberty House Group's …

**Ratio:** The successful resolution applicant is responsible for implementing the resolution plan

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**Reasoning:** The court found that Liberty House Group failed to make the required upfront payment, a

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**Interpretation:** The court interpreted the Resolution Plan and NCLAT's order as imposing a clear

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**Application:** The court applied the ratio to the facts by concluding that Liberty House

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## Parties

- **Judges:** Madan B.…
- **Appellants:** State Bank of…
- **Respondents:** ADHUNIK METALIKS…

## Timeline

- **2017-08-03 — CIRP Admi…**: Adjudicating Authority at Kolkata admitted Adhunik Metaliks Limited and Zion Steel…
- **2018-07-17 — Resolution Plan…**: Adjudicating Authority approved the…

## 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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