# State Bank of India vs. Prakash Gold Palace Private Limited

> NCLT judgment dated 2026-09-08. Citation: TCN-2026-NCLT-00988. State Bank of India, as a financial creditor, filed a Section 7 petition under the IBC, 2016,…

- **Court:** NCLT
- **Order date:** 8 Sept 2026
- **Citation:** TCN-2026-NCLT-00988
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chennai/state-bank-of-india-vs-prakash-gold-palace-private-limited-aqpnv

## Summary

### Background

State Bank of India, as a financial creditor, filed a Section 7 petition under the IBC, 2016, against Prakash Gold Palace Private Limited, the Corporate Debtor, for initiating Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor, engaged in the jewellery business, had availed significant credit facilities from SBI and a consortium of banks. The loan accounts became Non-Performing Assets (NPA) on 29.01.2025, and despite demand notices and legal actions, the Corporate Debtor failed to repay the outstanding dues, which amounted to over Rs. 126 Crores for SBI alone as of 12.03.2026. The Corporate Debtor raised several objections, including inconsistencies in default records, procedural irregularities in filing revised documents, invalid authorization for

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## Facts

State Bank of India (Financial Creditor) filed a petition under Section 7 of the IBC, 2016, against Prakash Gold Palace Private Limited (Corporate Debtor) on 13.03.2026.

The Corporate Debtor is engaged in the jewellery business and availed credit facilities from State Bank of India and a consortium of banks including Axis Bank, HDFC Bank Ltd, Indus Ind Bank, and Yes Bank.

The Corporate Debtor's directors are Prakash Chand Jain and Mukesh Kumar Jain.

Loan documents, including a working capital consortium agreement, deed of hypothecation, deeds of guarantee, security trustee agreement, and undertaking cum indemnity, were executed on 15.11.2021.

SBI CAP Trustee Company Ltd. was appointed as the security trustee for the consortium lenders.

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## Issues and analysis

### Issue 1: Whether there are irreconcilable contradictions between the "Record of Default" (NesL …

**Ratio:** The Adjudicating Authority has the power under Section 7(4) and 7(5)(b) of the IBC to

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**Reasoning:** The Tribunal noted the initial discrepancies and directed the petitioner to file a

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**Interpretation:** The procedural flexibility of the Adjudicating Authority allows for the

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**Application:** The Tribunal accepted the revised Record of Default filed by the petitioner,

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** State Bank of…
- **Respondents:** Prakash Gold…
- **Other parties:** Prakash Cha…; Mukesh Kuma…; +5 more
- **Advocates:** Shri. B. Rghavulu…; Mr.K.Chandrasekara…; +2 more

## Timeline

- **2021-01-01 — GECL Funding S…**: Petitioner sanctioned Rs 22.90 Crores under…
- **2021-01-29 — SBI Facilities…**: State Bank of India sanctioned Fund Based and Non-Fund Based facilities to 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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