# In the matter of J.K.S. Construction Private Limited CP(IB)-232(CHE)-2021

> NCLT judgment dated 2022-03-11. Citation: TCN-2022-NCLT-03800. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 11 Mar 2022
- **Citation:** TCN-2022-NCLT-03800
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/jks-construction-private-limited-cpib-232che-2021-60a4b060

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against J.K.S. Construction Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a sum of Rs. 1,03,36,97,378/- as on 28.10.2013 and Rs. 113,55,25,659.93/- as on 18.01.2021, with the date of default being 13.12.2017. The Corporate Debtor is engaged in the construction of infrastructure facilities and had availed fund-based and non-fund-based credit limits from the Financial Creditor. The loan account of the Corporate Debtor was declared NPA on 28.10.2013 in the books of SBI and on 01.12.2013 in the books of Bank of Maharashtra (BOM). The Financial Creditor along with BOM had filed OA No.333/2015 before

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## Facts

State Bank of India (SBI), the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against J.K.S. Construction Private Limited, the Corporate Debtor, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor is engaged in the construction of infrastructure facilities. SBI claimed a total outstanding debt of Rs. 113,55,25,659.93 as of 18.01.2021, with the date of default being 13.12.2017. The Corporate Debtor had availed fund-based and non-fund-based credit limits from SBI. The loan account was declared Non-Performing Asset (NPA) on 28.10.2013. SBI, along with Bank of Maharashtra (BOM), had filed OA No.333/2015 before DRT-II, Chennai, for recovery of Rs.115,39,31,669.57 as of

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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 IBC, 2016, allows a financial creditor to initiate CIRP against a

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**Reasoning:** The Adjudicating Authority considered the submissions of the Financial Creditor and the

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

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**Application:** The application was deemed maintainable as the Financial Creditor demonstrated

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## Parties

- **Judges:** (Retd.) S.…; Anil Ku…
- **Appellants:** State Bank of…
- **Respondents:** JKS CONSTRUCTION…

## Timeline

- **2005-11-14 — Incorporation of…**: J.K.S. Construction Private…
- **2009-12-02 — Credit Limit…**: Corporate Debtor availed…

## 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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