# In the matter of A.L. Sudarshan Constructions Company Limited CP (IB) No. 324-7-HDB-2020

> NCLT judgment dated 2022-05-06. Citation: TCN-2022-NCLT-02850. The case involves a Company Application filed by Canara Bank (formerly Syndicate Bank), the…

- **Court:** NCLT
- **Order date:** 6 May 2022
- **Citation:** TCN-2022-NCLT-02850
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/al-sudarshan-constructions-company-limited-cp-ib-no-324-7-hdb-2020-2fa95214

## Summary

### Background

The case involves a Company Application filed by Canara Bank (formerly Syndicate Bank), the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process (CIRP) against M/s. A.L. Sudershan Constructions Company Limited, the Corporate Debtor. The Financial Creditor claims that the Corporate Debtor defaulted on loan facilities availed since 1990, which were renewed periodically. The Corporate Debtor's accounts were classified as non-performing assets (NPA) since 11.06.2006. Despite repeated requests and notices, the Corporate Debtor failed to make payments. The Corporate Debtor acknowledged the debt multiple times and proposed OTS (One Time Settlement) which were not equivalent to the total

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## Facts

Syndicate Bank (now Canara Bank) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against A.L. Sudershan Constructions Company Limited. The Corporate Debtor had availed loan facilities from the Financial Creditor since 1990, which were renewed periodically. The Corporate Debtor's accounts were classified as NPA on 11.06.2006 due to irregularities and non-payment of dues. The Financial Creditor issued repeated requests and notices, but the Corporate Debtor failed to respond. The Corporate Debtor acknowledged the debt by issuing written acknowledgements and proposing OTS, which were rejected by the Financial Creditor. The amount in claim was Rs. 239,51,53,055.83/-. The Corporate

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IB Code, 2016, can be rejected by the Adjudicating …

**Ratio:** An Applicant under Section 7 of IB Code, 2016 cannot be rejected by the Adjudicating

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**Reasoning:** The Adjudicating Authority must look into the amount of the undisputed claim to find out

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**Interpretation:** The existence of a dispute regarding the exact amount of the claim does not

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**Application:** Even if the amount as alleged against the sale of the assets is considered as

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## Parties

- **Judges:** Bhaskara Pantula…; BINOD KUMAR…
- **Appellants:** Syndicate…
- **Respondents:** A.L. Sudarshan…; A.L. Sudarshan…

## Timeline

- **1990-01-01 — Loan Facilitie…**: The Corporate Debtor had availed loan…
- **2006-06-11 — Account Classified as…**: The accounts of the Corporate Debtor were classified as non-performing assets (NPA) since…

## 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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