# In the matter of Topworth Steels and Power Private Limited C.P. (IB) No. 590-NCLT-MB-2018

> NCLT judgment dated 2020-01-29. Citation: TCN-2020-NCLT-02143. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 29 Jan 2020
- **Citation:** TCN-2020-NCLT-02143
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/topworth-steels-and-power-private-limited-cp-ib-no-590-nclt-mb-2018-82dbe84f

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Topworth Steels & Power Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The application was filed due to a claimed default of ₹835,12,77,142/- inclusive of interest as of 31.03.2018. The Corporate Debtor had availed Term Loans and other facilities from the Applicant between 2005 and 2015. The account of the Corporate Debtor was classified as Non-Performing Asset (NPA) on 01.12.2014. A Corporate Debt Restructuring was executed on 30.03.2015, granting a credit facility aggregately by all the consortium members of ₹1346,72,00,000/-, out of which the Applicant Bank's share was ₹561,75,86,448/-. The NCLT initially

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## Facts

State Bank of India (SBI), the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Topworth Steels & Power Private Limited, the Corporate Debtor. SBI claimed a total default of ₹835,12,77,142/- inclusive of interest as on 31.03.2018. SBI had sanctioned Term Loans and other facilities to the Corporate Debtor from 2005 to 2015. The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) on 01.12.2014. A Corporate Debt Restructuring (CDR) was executed on 30.03.2015, granting a credit facility of ₹1346,72,00,000/-, with SBI's share being ₹561,75,86,448/-. The Corporate Debtor failed to repay the loan facilities. The NCLT initially dismissed the application, but the NCLAT set aside the

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the I&B Code, 2016, for initiating the Corporate …

**Ratio:** Section 7 of the I&B Code, 2016, allows a financial creditor to initiate CIRP against

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**Reasoning:** The NCLT considered the evidence presented by the Financial Creditor, including the loan

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**Interpretation:** Section 7 of the I&B Code provides a mechanism for financial creditors to

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**Application:** The NCLT applied the provisions of Section 7 of the I&B Code to the facts

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## Parties

- **Judges:** Mr Bhaskara…; Mr Rajesh…
- **Appellants:** State Bank of…
- **Respondents:** Topworth Steels &…

## Timeline

- **2014-12-01 — Account Classified as…**: The account of the Corporate Debtor was…
- **2015-03-30 — Corporate Debt…**: A Master Restructuring Facility was executed granting a credit facility aggregately by…

## 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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