# In the matter of Varrasana Ispat Ltd. CP (IB) No. 543-KB-2017

> NCLT judgment dated 2017-11-16. Citation: TCN-2017-NCLT-00189. The case involves an application filed by SBER Bank, a financial creditor, under Section 7 of…

- **Court:** NCLT
- **Order date:** 16 Nov 2017
- **Citation:** TCN-2017-NCLT-00189
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/varrasana-ispat-ltd-cp-ib-no-543-kb-2017-e2a06b48

## Summary

### Background

The case involves an application filed by SBER Bank, a financial creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate corporate insolvency resolution process against Varrasana Ispat Ltd., the corporate debtor. SBER Bank claimed that Varrasana Ispat Ltd. defaulted on a payment of Rs. 30,26,92,543.77 as of 10/10/2017. The corporate debtor contested the application, arguing that the petition was not maintainable because the person who filed the application on behalf of SBER Bank, Aleksei Nikolaevich Kechko, lacked the authority to do so. The corporate debtor also claimed that the financial creditor failed to implement restructuring and provide required limits, leading to a decline in the corporate debtor's turnover. The applicant bank

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## Facts

SBER Bank, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate corporate insolvency resolution process against Varrasana Ispat Ltd., the corporate debtor. The application was based on a default in payment of Rs. 30,26,92,543.77 as of 10/10/2017. SBER Bank had granted a term loan of Rs. 25 crore to Varrasana Ispat Ltd., repayable in eight equal quarterly installments with interest at 13.75% per annum. The loan agreement was dated 13/12/2013, and an addendum was made on 30/12/2013. The corporate debtor defaulted on the second installment, due on 30/11/2015. The applicant bank had sanctioned and granted financial assistance to the corporate debtor in the form of a term loan of Rs.25,00,00,000/- repayable in

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## Issues and analysis

### Issue 1: Whether the applicant financial creditor was …

**Ratio:** Section 179 of the Companies Act, 2013, empowers the Board of Directors to do all such

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**Reasoning:** The court reasoned that the General Power of Attorney executed by Mr. Herman Gref,

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**Interpretation:** The court interpreted the General Power of Attorney and the Charter of SBER

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**Application:** The court applied the ratio to the facts of the case, finding that Aleksei

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## Parties

- **Judges:** V. P. S…; Jinan…
- **Appellants:** SBER…
- **Respondents:** Varrasana Ispat…

## Timeline

- **2013-12-13 — Loan Agre…**: Credit facility agreement between SBER Bank…
- **2013-12-23 — Loan Disbur…**: Rs.25,00,00,000/- was disbursed to…

## 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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