# In the matter of Madhav Ginning and Pressing Private Limited

> NCLT judgment dated 2024-04-16. Citation: TCN-2024-NCLT-01704. 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-01704
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/madhav-ginning-and-pressing-private-limited-9337dec7

## 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 had proposed a One Time Settlement (OTS), which was not approved by the State Bank of India and subsequently rejected by the applicant after the debt assignment.

## Facts

Rajradhe Finance Limited (Financial Creditor) filed a company petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Madhav Ginning and Pressing Private Limited (Corporate Debtor) for initiating CIRP. State Bank of India had sanctioned credit facilities to the corporate debtor, disbursing Rs.9,66,32,000/- based on a sanction letter dated 2007-10-22. These facilities were secured by the deposit of title deeds. The credit facilities were enhanced in 2008, and a charge was created by mortgage. The corporate debtor resolved for renewal of credit facilities amounting to Rs.19,95,00,000/- in 2017. The corporate debtor defaulted in repayment from 2019-08-28, leading to the account being classified as NPA on 2019-11-28. SBI issued notices under SARFAESI

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## Issues and analysis

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

**Ratio:** Section 7 of the IBC requires the existence of a debt and a default for the initiation of

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**Reasoning:** The court found that the corporate debtor had defaulted in repayment of its debts, and

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**Interpretation:** Section 7 of the IBC provides the framework for initiating CIRP by a financial

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**Application:** In this case, the court found that the applicant had provided sufficient

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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 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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