# In the matter of Gajanan Solvex Limited C.P. No. 1023-IBC-MB-2021

> NCLT judgment dated 2022-07-20. Citation: TCN-2022-NCLT-01629. The State Bank of India, acting as the Financial Creditor/Petitioner, filed a Company Petition…

- **Court:** NCLT
- **Order date:** 20 Jul 2022
- **Citation:** TCN-2022-NCLT-01629
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/gajanan-solvex-limited-cp-no-1023-ibc-mb-2021-5cea3f3b

## Summary

### Background

The State Bank of India, acting as the Financial Creditor/Petitioner, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Gajanan Solvex Limited, the Corporate Debtor. The petition was filed due to an unresolved financial debt of Rs. 63,69,98,485.34/-.

## Facts

Gajanan Solvex Limited (Corporate Debtor) requested State Bank of India (Petitioner/Financial Creditor) to sanction a Fund Based Working Capital (FBWC) limit of Rs. 20 Crores and a Fund Based Term Loan (FBTL) limit of Rs. 35 Crores, totaling Rs. 55 Crores, including a Letter of Credit (LC) limit of Rs. 1.25 crores. The Petitioner sanctioned the credit facilities under a Letter of Arrangement dated 03.11.2011. The Petitioner provided various documents in support of the facilities granted, including loan agreements, hypothecation agreements, and letters of confirmation. The Petitioner enhanced and renewed the loan facility on request of the Corporate Debtor. The Corporate Debtor's authorized signatory affirmed the balances in the loan accounts and executed a Balance

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repaying …

**Ratio:** The principle is that if a corporate debtor fails to repay its debt to a financial

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**Reasoning:** The court reviewed the Form-1 filed by the Petitioner and observed that the Corporate

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**Interpretation:** The interpretation of 'default' under the IBC is a failure to pay a debt when

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**Application:** The court applied this principle to the facts by examining the loan documents

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## Parties

- **Judges:** H.V. Subb…; ANURADHA SANJAY…
- **Appellants:** State Bank of…
- **Respondents:** Gajanan Solvex…; None Pr…

## Timeline

- **2011-11-03 — Letter of Arr…**: Petitioner sanctioned credit…
- **2011-11-09 — Agreement o…**: Agreement of loan for…

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