# In the matter of Supraja Textiles Pvt. Ltd. CP (IB) No. 188-10-HDB-2018

> NCLT judgment dated 2018-08-23. Citation: TCN-2018-NCLT-00909. The case involves an application under Section 10 of the Insolvency and Bankruptcy Code (IBC),…

- **Court:** NCLT
- **Order date:** 23 Aug 2018
- **Citation:** TCN-2018-NCLT-00909
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/supraja-textiles-pvt-ltd-cp-ib-no-188-10-hdb-2018-3257f14a

## Summary

### Background

The case involves an application under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Supraja Textiles Private Limited. The company was incorporated on 05.06.2005 and has its registered office in Nandimpalem Village, Prathipadu Mandal, Guntur District, Andhra Pradesh. The corporate debtor has committed default in payment of Rs. 16,13,67,283/-, with the date of default being 28.12.2016. The corporate applicant filed documents to prove the existence of default. SBI, one of the financial creditors, stated that the loan amount of the corporate debtor was classified as Non-Performing Asset (NPA) on 28.12.2015 due to non-repayment of outstanding liabilities. SBI had invoked the provisions

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## Facts

Supraja Textiles Private Limited was incorporated on 05.06.2005, with its registered office in Andhra Pradesh. The company defaulted on a payment of Rs. 16,13,67,283/- with the date of default being 28.12.2016. SBI classified the loan account as NPA on 28.12.2015. SBI initiated recovery proceedings under the SARFAESI Act, including issuing demand and possession notices. The Corporate Debtor proposed Mr. Manivannan.J as the Interim Resolution Professional. A shareholder holding 48% of the voting rights, Mr. Guntupalli Srinivasa Rao, objected to the petition, alleging financial irregularities and lack of consent from all parties to a MOU. The petition was filed on 09.05.2018, before the amendment to Sec. 10(3)(c) of the IBC came into effect on 06.06.2018, which requires

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## Issues and analysis

### Issue 1: Whether the application under Section 10 of the IBC should be admitted, considering the default and …

**Ratio:** The existence of debt and occurrence of default are primary considerations for admitting

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**Reasoning:** The Adjudicating Authority considered the documents filed by the Corporate Applicant,

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**Interpretation:** Section 10 of the IBC allows a corporate debtor to initiate CIRP upon the

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**Application:** The Adjudicating Authority found that the Corporate Applicant had demonstrated

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Respondents:** Supraja Textiles…

## Timeline

- **2005-06-05 — Incorporation of Supraja Textiles Private…**: Supraja Textiles Private…
- **2015-12-28 — Loan Account Classified…**: SBI classified the loan account of Supraja Textiles Private Limited as Non-Performing…

## 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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