# In the matter of Madhav Ginning and Pressing Private Limited

> NCLT judgment dated 2024-04-16. Citation: TCN-2024-NCLT-01721. The case pertains to a Company Petition filed under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 16 Apr 2024
- **Citation:** TCN-2024-NCLT-01721
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/madhav-ginning-and-pressing-private-limited-50d6fc45

## Summary

### Background

The case pertains to a Company Petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Rajradhe Finance Limited (Financial Creditor) against Madhav Ginning and Pressing Private Limited (Corporate Debtor) for initiating the Corporate Insolvency Resolution Process (CIRP). The corporate debtor had availed credit facilities from State Bank of India, which were later assigned to the applicant. The corporate debtor defaulted in repayment, leading to the account being classified as NPA. Despite attempts to recover the outstanding debt, a significant amount remained unpaid. The corporate debtor also proposed a One Time Settlement (OTS), which was rejected by the State Bank of India and later by the applicant after the debt assignment.

## Facts

Rajradhe Finance Limited filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Madhav Ginning and Pressing Private Limited. State Bank of India had sanctioned credit facilities to the corporate debtor, disbursing Rs.9,66,32,000 on 22.10.2007. These facilities were secured by the deposit of title deeds. The credit facilities were enhanced on 14.10.2008, with a charge created by mortgage. On 30.11.2017, the corporate debtor resolved to renew credit facilities to Rs.19,95,00,000, hypothecating its assets. SBI renewed the facilities on 06.12.2017 and again on 15.03.2019. The corporate debtor defaulted on 28.08.2019, leading to NPA classification on 28.11.2019. SBI issued notices under SARFAESI Act and filed an application with DRT.

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## Issues and analysis

### Issue 1: Whether the requirements of Section 7 of the Insolvency and Bankruptcy Code, 2016, are met for …

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

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**Reasoning:** The court reasoned that the applicant had provided sufficient evidence, including

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**Interpretation:** Section 7 is interpreted to mean that if a financial creditor demonstrates a

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**Application:** In this case, the applicant demonstrated a clear default through documentary

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## Parties

- **Judges:** Chitra Ha…; Velamur G Venkata…
- **Appellants:** Rajradhe Finance…
- **Respondents:** Madhav Ginning…

## Timeline

- **2007-10-22 — Sanction…**: State Bank of India sanctioned credit…
- **2008-10-14 — Enhanced Credit…**: Credit facilities were enhanced, and…

## 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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