# In the matter of Vikram Iron and Steel Company Private Limited C.P. (IB) No. 1698-NCLT-MB-2019

> NCLT judgment dated 2020-01-10. Citation: TCN-2020-NCLT-02374. Corporation Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 10 Jan 2020
- **Citation:** TCN-2020-NCLT-02374
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vikram-iron-and-steel-company-private-limited-cp-ib-no-1698-nclt-mb-2019-3c5b59bf

## Summary

### Background

Corporation Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Vikram Iron and Steel Company Private Limited, the Corporate Debtor, due to a default in repayment of credit facilities. The bank had sanctioned credit facilities to the Corporate Debtor in the form of Demand Loan, Cash Credit, and Working Capital Term Loan. The Corporate Debtor's account was classified as Non-Performing Asset (NPA) on 08.02.2014. The bank issued a notice under Section 13(2) of the SARFAESI Act, 2002, calling upon the Corporate Debtor and its Guarantors to pay the outstanding liabilities. The Corporate Debtor disputed the claim. The bank took over symbolic possession of the property under

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## Facts

Corporation Bank sanctioned credit facilities including Demand Loan, Cash Credit, and Working Capital Term Loan to Vikram Iron and Steel Company Private Limited. The total sanctioned amount was ₹10,08,72,000/-. The bank submitted six Sanction Letters from 2007 to 2013. Various documents such as Deed of Hypothecation, Memorandum of Deposit of Title Deeds, Supplemental Deeds of Hypothecation, Guarantee Agreements, and Demand Promissory Notes were executed to secure the credit facilities. The Corporate Debtor's account was classified as NPA on 08.02.2014. The bank issued a notice under Section 13(2) of the SARFAESI Act, 2002, on 13.02.2014, demanding payment of outstanding liabilities. The Corporate Debtor replied on 05.03.2014, disputing the claim. The bank issued

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Adjudicating Authority (NCLT) found that the application was complete and filed under

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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**Application:** The application filed by Corporation Bank was found to be complete and in the

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## Parties

- **Judges:** Mr Rajesh…; Mr Bhaskara…
- **Appellants:** Corporatio…
- **Respondents:** Vikram Iron and…

## Timeline

- **2014-02-08 — Account Classified as…**: The account of the Corporate Debtor was…
- **2014-02-13 — SARFAESI Notic…**: Corporation Bank issued a notice under Section 13(2) of the SARFAESI Act, 2002, calling…

## 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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