# In the matter of C P S Steel India Private Limited CP-IB-38-CHE-2021

> NCLT judgment dated 2022-04-25. Citation: TCN-2022-NCLT-03078. The case pertains to an application filed by City Union Bank Limited, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 25 Apr 2022
- **Citation:** TCN-2022-NCLT-03078
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/c-p-s-steel-india-private-limited-cp-ib-38-che-2021-70569408

## Summary

### Background

The case pertains to an application filed by City Union Bank Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP) against M/s. CPS Steel India Private Limited, the Corporate Debtor. The Financial Creditor claims that the Corporate Debtor has defaulted on a debt amounting to ₹9,12,12,771.34/- with the date of default being 31.03.2018. The application seeks to admit the case, declare a moratorium, and appoint an Interim Resolution Professional (IRP).

## Facts

City Union Bank Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against CPS Steel India Private Limited, the Corporate Debtor. The Corporate Debtor is a private limited company incorporated on 11.04.2003, engaged in the manufacturing of steel. The Financial Creditor claimed a default of ₹9,12,12,771.34/- with the date of default being 31.03.2018. The Financial Creditor had sanctioned a secured overdraft facility of Rs. 8,15,00,000/- repayable on 31.03.2019 and a term loan of Rs. 25,00,000/- repayable in 24 months, which ended on 31.03.2020. The Corporate Debtor admitted the amounts due on 06.06.2019 and sought twelve months for an amicable settlement. The Corporate Debtor did not appear

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** The ratio is based on the interpretation of Section 7 of the IBC, 2016, which allows a

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**Reasoning:** The Adjudicating Authority reasoned that the Financial Creditor had demonstrated the

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**Interpretation:** Section 7 of the IBC, 2016, is interpreted to mean that once the Adjudicating

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**Application:** In this case, the Financial Creditor provided evidence of a financial debt and

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## Parties

- **Judges:** (Retd.) S.…; Anil Ku…
- **Appellants:** City Union Bank…
- **Respondents:** CPS Steel India…

## Timeline

- **2003-04-11 — Incorporation of…**: CPS Steel India Private…
- **2018-03-31 — Date of D…**: The Corporate Debtor defaulted on the…

## 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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