# In the matter of Kosas Industries Private Limited

> NCLT judgment dated 2024-02-29. Citation: TCN-2024-NCLT-02319. The case involves a Company Petition filed by State Bank of India (Financial Creditor) under…

- **Court:** NCLT
- **Order date:** 29 Feb 2024
- **Citation:** TCN-2024-NCLT-02319
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kosas-industries-private-limited-a1a89e79

## Summary

### Background

The case involves a Company Petition filed by State Bank of India (Financial Creditor) under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC), seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Kosas Industries Private Limited (Corporate Debtor). The petition was initially rejected by the Adjudicating Authority on the grounds of limitation on 09.02.2023. An appeal was filed before the National Company Law Appellate Tribunal (NCLAT), which allowed the appeal on 14.09.2023, setting aside the impugned order and remitting the matter back to the Adjudicating Authority. The NCLAT noted a settlement agreement dated 14.03.2018, which was not considered in the initial order. The applicant then filed a Restoration Application No.35/2023 on

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## Facts

State Bank of India (Financial Creditor) filed a Company Petition under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC), seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Kosas Industries Private Limited (Corporate Debtor). The Financial Creditor had sanctioned debt facilities to the Corporate Debtor amounting to Rs.49,04,00,000/- on 07.05.2011, which were renewed and enhanced over time. The Corporate Debtor's account was classified as NPA on 28.12.2015. The Financial Creditor initiated securitization proceedings against the Corporate Debtor, which was challenged by the Corporate Debtor. The Corporate Debtor filed an application before the DRT, acknowledging its liabilities and proposing to pay Rs. 9,40,00,000/- for an amicable

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency & Bankruptcy Code, 2016 is …

**Ratio:** The Tribunal, while adjudicating upon an application for admission into Resolution

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**Reasoning:** The tribunal considered the submissions of both parties and the documents on record. It

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

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**Application:** The tribunal found that the Corporate Debtor owed a financial debt exceeding

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## Parties

- **Judges:** Anu Jagmoha…; KISHORE VEMULAPALL…
- **Appellants:** State Bank of…
- **Respondents:** Kosas Industries…

## Timeline

- **2011-05-07 — Sanction of Debt…**: Financial Creditor sanctioned debt facilities to the Corporate Debtor amounting to…
- **2015-12-28 — Account Classified as…**: The account of the Corporate…

## Legal provisions

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

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