# In the matter of Ganga Foundations Private Limited IBA-870-2020

> NCLT judgment dated 2022-01-10. Citation: TCN-2022-NCLT-04473. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 10 Jan 2022
- **Citation:** TCN-2022-NCLT-04473
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ganga-foundations-private-limited-iba-870-2020-fc00ef9e

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Ganga Foundations Private Limited. The Financial Creditor, State Bank of India, claimed a default amount of Rs. 44,57,38,746.16 as of 18.03.2020. The account was classified as NPA on 30.04.2017. The Corporate Debtor had availed Dropline Overdraft Term Loan and Dropline Overdraft Working Capital Demand Loan under Asset Backed Loan CRE. The Financial Creditor also initiated SARFAESI proceedings under Section 13(2) of the SARFAESI Act on 12.05.2017. The Corporate Debtor proposed an OTS which was accepted, and some payments were made, but the full amount was not paid.

## Facts

State Bank of India (SBI), the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Ganga Foundations Private Limited, the Corporate Debtor. The Corporate Debtor availed Dropline Overdraft Term Loan and Dropline Overdraft Working Capital Demand Loan under Asset Backed Loan CRE. The Financial Creditor claimed a sum of Rs. 49,30,00,000/- as due and payable. The default amount was mentioned as Rs. 44,57,38,746.16 as on 18.03.2020, and the date of NPA was 30.04.2017. The Financial Creditor also initiated SARFAESI proceedings under Section 13(2) of the SARFAESI Act on 12.05.2017. The Corporate Debtor proposed an OTS which was accepted, and some payments

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## Issues and analysis

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

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Tribunal observed that the Applicant, State Bank of India, is a Financial Creditor

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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**Application:** The Tribunal applied Section 7 to the facts of the case, finding that State

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## Parties

- **Judges:** Ramalingam…; Shri. Samee…
- **Appellants:** State Bank of…
- **Respondents:** Ganga Foundations…; Ganga Foundations…

## Timeline

- **2017-04-30 — Account Classified as…**: The account of Ganga Foundations Private Limited was classified as Non-Performing Asset…
- **2017-05-12 — SARFAESI Proceedings…**: State Bank of India initiated SARFAESI proceedings under Section 13(2) of the SARFAESI…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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