# In the matter of J. KHETSIDAS MACHINE TOOL WORKS PRIVATE LIMITED

> NCLT judgment dated 2025-01-31. Citation: TCN-2025-NCLT-00542. Small Industries Development Bank of India (SIDBI) filed a petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 31 Jan 2025
- **Citation:** TCN-2025-NCLT-00542
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/j-khetsidas-machine-tool-works-private-limited-618e58a3

## Summary

### Background

Small Industries Development Bank of India (SIDBI) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against J. Khetsidas Machine Tool Works Private Limited, the Corporate Debtor. The petition was based on the Corporate Debtor's default in payment of financial debt. The Financial Creditor had granted various credit facilities to the Corporate Debtor, and the Corporate Debtor had provided security by executing various security documents. The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) on 16.03.2021.

## Facts

Small Industries Development Bank of India (SIDBI) extended credit facilities to J. Khetsidas Machine Tool Works Private Limited. The Corporate Debtor defaulted on repayments, leading to its account being classified as a Non-Performing Asset (NPA) on 16.03.2021. The outstanding financial debt amounted to Rs.4,94,01,445.67/- as of 10.12.2023. SIDBI issued a Recall cum Demand Notice under Section 38 of the SIDBI Act on 12.05.2021, a Letter for Invocation of Guarantee on 13.10.2022, and a demand notice under Section 13(2) of the SARFAESI Act, 2002 on 16.03.2023. The Corporate Debtor proposed a One Time Settlement offer of Rs.1,25,00,000 on 29.07.2023, which was rejected by SIDBI on 18.08.2023. SIDBI filed a petition under Section 7 of the Insolvency and Bankruptcy Code,

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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:** Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4(1) of the

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**Reasoning:** The Adjudicating Authority found that the Financial Creditor's application was complete

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** In this case, the Financial Creditor's application was found to be complete,

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## Parties

- **Judges:** BIDISHA BA…; SAMEER…
- **Appellants:** Small Industries…
- **Respondents:** J. Khetsidas…
- **Advocates:** A. Si…; R. B…; +3 more

## Timeline

- **2021-03-16 — Account Classified as…**: The Corporate Debtor's account was…
- **2021-05-12 — Recall cum Dema…**: SIDBI issued a Recall cum Demand Notice…

## 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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