# In the matter of A A Estates Private Limited I.A. No. 2456-MB-2022 In C.P. No. 783-MB-I&B-2021

> NCLT judgment dated 2022-12-06. Citation: TCN-2022-NCLT-00233. State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 6 Dec 2022
- **Citation:** TCN-2022-NCLT-00233
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/a-a-estates-private-limited-ia-no-2456-mb-2022-in-cp-no-783-mb-ib-2021-b51c2b6f

## Summary

### Background

State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against A A Estates Private Limited, seeking initiation of Corporate Insolvency Resolution Process (CIRP) due to an unresolved financial debt of Rs. 1,35,26,12,129/-. The corporate debtor had approached the petitioner for credit facilities, which were granted in 2012. The corporate debtor defaulted on 31.03.2014, leading to the account being classified as NPA. Despite restructuring and a compromise proposal, the default continued, prompting the petitioner to file the application before the NCLT.

## Facts

A A Estates Private Limited approached State Bank of India (SBI) for credit facilities, which were sanctioned on 18.02.2012, amounting to Rs. 70,00,00,000/-. The credit facilities were secured by a pari passu charge on flats, mortgage of land owned by RNA Corp Pvt. Ltd., and personal guarantees. The Corporate Debtor first defaulted on 31.03.2014. SBI restructured the loan in March 2014, extending the DCCO. The Corporate Debtor acknowledged the debt in a revival letter dated 18.03.2014. The account was classified as NPA on 30.06.2014. SBI issued legal demand notices and initiated SARFAESI proceedings. The Corporate Debtor submitted a compromise proposal on 31.01.2018, admitting to an outstanding principal amount of Rs. 59.33 Crores. The last payment received from the

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## Issues and analysis

### Issue 1: Whether the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable …

**Ratio:** The principle established in State Bank of India vs. Athena Energy Ventures Private

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**Reasoning:** The NCLT relied on the judgment of the Hon'ble NCLAT in the Athena Energy Ventures case,

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**Interpretation:** This interpretation clarifies that the IBC does not prevent a financial

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**Application:** In this case, the NCLT applied the Athena Energy Ventures principle to allow

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## Parties

- **Judges:** H.V. Subb…; ANURADHA SANJAY…
- **Appellants:** State Bank of…
- **Respondents:** A A Estates…

## Timeline

- **2011-09-30 — Application for Credit…**: The Corporate Debtor approached the…
- **2012-02-18 — Sanction of Credit…**: The Petitioner granted Cash Credit Facilities of Rs. 70,00,00,000/- 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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