# In the matter of Kosas Industries Private Limited CP (IB) No.1446-MB-IV-2020

> NCLT judgment dated 2023-02-09. Citation: TCN-2023-NCLT-04669. The case involves an application filed by State Bank of India (SBI), the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 9 Feb 2023
- **Citation:** TCN-2023-NCLT-04669
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kosas-industries-private-limited-cp-ib-no1446-mb-iv-2020-a7220972

## Summary

### Background

The case involves an application filed by State Bank of India (SBI), the Financial Creditor, under Section 7 of the Insolvency & Bankruptcy Code (I&B Code), 2016, against Kosas Industries Private Limited, the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). SBI claimed a default of Rs. 98,19,09,715.15 as of 30.10.2020. The Corporate Debtor had its account classified as NPA on 28.12.2015. The Financial Creditor sanctioned Fund Based Working Facility (FBWC) to the Corporate Debtor vide Sanction Letter dated 07.05.2011, which was renewed and enhanced over time. The Corporate Debtor submitted an OTS proposal on 06.12.2021 to settle the accounts for Rs. 8,00,00,000. The Financial Creditor issued a Loan Recall Notice on 10.05.2019,

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## Facts

State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Kosas Industries Private Limited, claiming a default of Rs. 98,19,09,715.15 as of October 30, 2020. The Corporate Debtor's account was classified as Non-Performing Asset (NPA) on December 28, 2015. SBI had sanctioned a Fund Based Working Facility (FBWC) to Kosas Industries on May 7, 2011, which was subsequently renewed and enhanced. The Corporate Debtor submitted a One-Time Settlement (OTS) proposal on December 6, 2021, offering to settle the accounts for Rs. 8,00,00,000. SBI issued a Loan Recall Notice on May 10, 2019, claiming Rs. 81,22,40,826 due as of May 9, 2019. A NeSL Report dated July 31,

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency & …

**Ratio:** The application under Section 7 must be filed within the prescribed limitation period

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**Reasoning:** The NCLT observed that the Financial Creditor had not filed any application to condone

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**Interpretation:** The interpretation of Section 7 requires strict adherence to the limitation

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**Application:** In this case, the Financial Creditor failed to file the application within the

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## Parties

- **Judges:** Manoj Kumar…; KISHORE VEMULAPALL…
- **Appellants:** State Bank of…
- **Respondents:** Kosas Industries…

## Timeline

- **2011-05-07 — Sanction o…**: Financial Creditor sanctioned Fund Based…
- **2015-12-28 — NPA Classif…**: Account of the Corporate…

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