# In the matter of Uttam Galva Steel Limited CP (IB) 920/MB/C-I/2020

> NCLT judgment dated 2020-10-01. Citation: TCN-2020-NCLT-00475. State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 1 Oct 2020
- **Citation:** TCN-2020-NCLT-00475
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/uttam-galva-steel-limited-cp-ib-920mbc-i2020-60e7b15b

## Summary

### Background

State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Uttam Galva Steel Limited, alleging default in payment of a financial debt. The petitioner had granted an external commercial borrowing facility to the respondent. A previous CIRP application was withdrawn following a settlement involving ArcelorMittal. After the settlement, the respondent continued to default on its obligations.

## Facts

State Bank of India (SBI) granted Uttam Galva Steel Limited an external commercial borrowing (ECB) facility of US$50 million under a Foreign Currency Facility Agreement dated 2013-05-17. The ECB facility was secured by the respondent's assets and carried an interest rate of 14.85%. The respondent defaulted, leading SBI to file a Section 7 petition under the Insolvency and Bankruptcy Code (IBC) in 2017. This initial CIRP application was withdrawn after ArcelorMittal settled a portion of the debt, reducing the outstanding amount to US$25 million. The respondent again defaulted on 2019-11-29, owing US$6,674,943.46. SBI sent reminder letters, but the respondent expressed inability to pay. As of 2020-03-06, the total outstanding ECB debt was US$14,618,636.76 (INR

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## Issues and analysis

### Issue 1: Whether the Petitioner has established that the loan was duly disbursed to the Respondent and that …

**Ratio:** The principle is that if a debt and default are proven, the adjudicating authority is

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**Reasoning:** The court relied on the Foreign Currency Facility Agreement, CIBIL report, and the

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**Interpretation:** The interpretation is that the petitioner must provide sufficient evidence to

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**Application:** In this case, the court found that the petitioner had provided sufficient

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## Parties

- **Judges:** Janab Mohammed…; RavikumarDu…
- **Appellants:** State Bank of…
- **Respondents:** Uttam Galva…

## Timeline

- **2013-05-17 — Foreign Currency…**: State Bank of India and Uttam Galva Steel Limited entered into a Foreign Currency…
- **2017-12-29 — Initial CIRP Ap…**: State Bank of India filed a Section 7 petition under the IBC against Uttam Galva Steel…

## 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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