# In the matter of Balaji Stake Rice Industries Limited CP (IB) No.67-9-HDB-2023

> NCLT judgment dated 2023-05-22. Citation: TCN-2023-NCLT-03229. The case involves an application filed by ASREC (India) Limited, the Financial Creditor, under…

- **Court:** NCLT
- **Order date:** 22 May 2023
- **Citation:** TCN-2023-NCLT-03229
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/balaji-stake-rice-industries-limited-cp-ib-no67-9-hdb-2023-726d095c

## Summary

### Background

The case involves an application filed by ASREC (India) Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Balaji Stake Rice Industries Limited, the Corporate Debtor. The Corporate Debtor had availed credit facilities from State Bank of Hyderabad (later merged with State Bank of India) since 2005, secured by personal guarantees, hypothecation of raw materials, plant, machinery, and equitable mortgage of factory and agricultural lands. The Corporate Debtor defaulted on repayments, leading to its account being classified as Non-Performing Asset (NPA) on March 8, 2013. The Banker assigned the title, interest, securities, and dues payable by the

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## Facts

Balaji Stake Rice Industries Limited (Corporate Debtor) availed credit facilities from State Bank of Hyderabad (later merged with State Bank of India) since 2005. These facilities were secured by personal guarantees, hypothecation of raw materials, plant, machinery, and equitable mortgage of factory and agricultural lands. The Corporate Debtor defaulted in repayment of interest and installments, leading to its account being classified as Non-Performing Asset (NPA) on March 8, 2013. On September 30, 2014, the Banker assigned the title, interest, securities, and dues payable by the Corporate Debtor to ASREC (India) Limited (Financial Creditor). The Corporate Debtor proposed One Time Settlement (OTS) offers on September 12, 2016, and October 3, 2016, for Rs.12.25 Crores

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## Issues and analysis

### Issue 1: Whether a Financial debt as claimed by the Petitioner is due and payable by the Corporate Debtor to …

**Ratio:** The ratio is based on the Supreme Court's judgment in Kotak Mahindra Bank Limited versus

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**Reasoning:** The NCLT relied on the Supreme Court's judgment and the fact that the financial debt

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**Interpretation:** The interpretation is that a recovery certificate issued by the DRT

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**Application:** The ratio and reasoning apply to the specific facts of the case because the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Asrec (India)…
- **Respondents:** Balaji Stake Rice…

## Timeline

- **2005-01-01 — Credit Facilities…**: Corporate Debtor availed credit…
- **2013-03-08 — Account Classified as…**: Corporate Debtor's account…

## 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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