# in the matter of Western Refrigeration Pvt. Ltd. CP (IB) No. 17/7/NCLT/AHM/2017

> NCLT judgment dated 2017-05-26. Citation: TCN-2017-NCLT-00847. State Bank of India, Colombo, filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 26 May 2017
- **Citation:** TCN-2017-NCLT-00847
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/western-refrigeration-pvt-ltd-cp-ib-no-177ncltahm2017-16d4fd67

## Summary

### Background

State Bank of India, Colombo, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking reliefs under Section 7(5)(a) and Section 13 of the Code against Western Refrigeration Private Limited, a private limited company registered under the Companies Act. The petitioner bank had extended credit facilities to M/s. Haikawa Industries (P) Limited, which was guaranteed by M/s. Western Refrigeration Private Limited. Haikawa Industries defaulted on payments, leading the bank to issue a legal notice to Western Refrigeration demanding payment. Western Refrigeration disputed the claim, stating the matter was sub-judice and pending in Debt Recovery Tribunal (DRT), Mumbai. The petitioner bank filed an additional affidavit enclosing the Memorandum of

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## Facts

State Bank of India, Colombo, extended credit facilities to M/s. Haikawa Industries (P) Limited, which was guaranteed by M/s. Western Refrigeration Private Limited. Haikawa Industries defaulted on the loan. State Bank of India issued a legal notice to Western Refrigeration demanding payment of Rs. 49,27,02,852.08 as on 31.1.2017. Western Refrigeration replied, stating the matter was sub-judice and pending in Debt Recovery Tribunal (DRT), Mumbai. Western Refrigeration had sent a letter to State Bank of India on 30th March, 2010, stating that the Corporate Guarantee stood discontinued and determined with immediate effect, which was acknowledged by the Petitioner Bank. State Bank of India filed OA No. 242 of 2013 before the DRT against Western Refrigeration and other

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## Issues and analysis

### Issue 1: Whether the Petitioner Bank is entitled to trigger the insolvency resolution process under Section …

**Ratio:** A 'Financial Creditor' is entitled to file an Application for initiating Corporate

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**Reasoning:** The court considered the definition of 'financial creditor,' 'financial debt,' 'corporate

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**Interpretation:** The court interpreted the provisions of Section 5(7) and 5(8) of the IBC to

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**Application:** The court applied the definitions and provisions of the IBC to the facts of the

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** State Bank of…
- **Respondents:** Western Refrigerat…

## Timeline

- **2008-01-14 — Guarantee Ag…**: Respondent Company…
- **2010-03-30 — Revocation of…**: Respondent Company sent a letter to the Petitioner Bank stating that the Corporate…

## 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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