# In the matter of Action Ispat and Power Private Limited IA-2347,3355 & 3615-2021 in (IB)-1096-PB-2018

> NCLT judgment dated 2022-03-23. Citation: TCN-2022-NCLT-03583. The State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 23 Mar 2022
- **Citation:** TCN-2022-NCLT-03583
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/action-ispat-and-power-private-limited-ia-23473355-3615-2021-in-ib-1096-pb-2018-bd2b7c04

## Summary

### Background

The State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/S. Action Ispat and Power Private Limited, the Corporate Debtor. The application was filed on 13.08.2018. The Corporate Debtor is a steel manufacturer with a steel plant in Jharsuguda, Odisha. In 2007, the Corporate Debtor approached the State Bank of India to avail various credit facilities. The Adjudicating Authority issued notice in the application on 31st August, 2018. Subsequently, the Applicant filed IA-481/2021, seeking substitution of SBI with CFM Asset Reconstruction Pvt. Ltd., as the debt payable to SBI was assigned to the Asset Reconstruction Company through an assignment

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## Facts

The State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/S. Action Ispat and Power Private Limited, the Corporate Debtor. The application was filed on 13.08.2018. The Corporate Debtor is a steel manufacturer located in Jharsuguda, Odisha, and had availed credit facilities from SBI in 2007. The total outstanding amount was Rs. 722,75,802,815.10 as of 30.06.2018. SBI later sought to substitute itself with CFM Asset Reconstruction Pvt. Ltd. The Corporate Debtor objected to the application, arguing that it was barred by limitation, claiming the date of NPA was 31.03.2013. SBI countered that a letter dated 16.07.2016 from the Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the application filed by the State Bank of India under Section 7 of the Insolvency and …

**Ratio:** Section 238A of the IBC incorporates the Limitation Act, 1963, making its provisions

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**Reasoning:** The Adjudicating Authority considered the Corporate Debtor's argument that the

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**Interpretation:** Section 18 of the Limitation Act, 1963, provides a crucial exception to the

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**Application:** The Corporate Debtor's letter dated 16.07.2016, explicitly acknowledged the

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** State Bank of…
- **Respondents:** M/s Action Ispat…

## Timeline

- **2007-01-01 — Corporate Debtor…**: The Corporate Debtor approached the State Bank of India to avail various credit…
- **2013-03-31 — Alleged Date…**: The Corporate Debtor claimed the date of NPA was 31.03.2013, for a sum of Rs.…

## 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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