# In the matter of Vaksh Steels Private Limited CP (IB) No. 499-7-HDB-2018

> NCLT judgment dated 2019-02-13. Citation: TCN-2019-NCLT-04858. The case involves a petition filed by State Bank of India, the Financial Creditor, against…

- **Court:** NCLT
- **Order date:** 13 Feb 2019
- **Citation:** TCN-2019-NCLT-04858
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vaksh-steels-private-limited-cp-ib-no-499-7-hdb-2018-c69f8fcd

## Summary

### Background

The case involves a petition filed by State Bank of India, the Financial Creditor, against Vaksh Steels Private Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The Financial Creditor claims that the Corporate Debtor defaulted in repaying a sum of Rs. 37,81,36,705. The Corporate Debtor admits to availing loans but attributes the default to external factors affecting the steel industry. The Financial Creditor initiated action under the SARFAESI Act, 2002, before DRT Hyderabad, which is pending admission. The Corporate Debtor proposed a One Time Settlement (OTS) through CGM Asset Reconstruction Private Limited, which was under consideration.

## Facts

State Bank of India (SBI), the Financial Creditor, filed a petition against Vaksh Steels Private Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, claiming a default of Rs. 37,81,36,705. Vaksh Steels had availed term loans, working capital limits, and non-fund-based limits from SBI, totaling Rs. 34.80 crores, securing them with hypothecation of movable and mortgage of immovable properties. The account was declared NPA on 25.12.2016. SBI initiated proceedings under the SARFAESI Act, 2002, before DRT Hyderabad, which are pending. Vaksh Steels admitted to availing the loan but attributed the default to external factors affecting the steel industry, such as cheap imports from China, South Korea, and Japan, increased raw

…

## Issues and analysis

### Issue 1: Whether there is a debt and default for …

**Ratio:** Section 7 of the IBC requires the Adjudicating Authority to determine whether a default

…

**Reasoning:** The Tribunal noted that the Corporate Debtor admitted to availing the loan from the

…

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

…

**Application:** In this case, the Corporate Debtor admitted to availing the loan and there was

…

## Parties

- **Judges:** Ratakonda…; Ratakonda…
- **Appellants:** State Bank of…
- **Respondents:** Vaksh Steels…; Vaksh Steels Pvt…

## Timeline

- **2016-12-25 — Account Decla…**: The account of Vaksh Steels Private Limited was declared Non-Performing Asset (NPA) with…
- **2018-08-18 — Amount in D…**: The amount in default was stated to be Rs. 37,81,36,705 plus applicable penal interest…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/vaksh-steels-private-limited-cp-ib-no-499-7-hdb-2018-c69f8fcd