# In the matter of National Steel and Agro Industries Ltd. CP (IB) 2067-MB-2019

> NCLT judgment dated 2022-04-11. Citation: TCN-2022-NCLT-03279. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 11 Apr 2022
- **Citation:** TCN-2022-NCLT-03279
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/national-steel-and-agro-industries-ltd-cp-ib-2067-mb-2019-5a98f1db

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against National Steel & Agro Industries Ltd. The petition was originally filed by Bank of India as the Financial Creditor (Original Lender). Subsequently, JM Financial Asset Reconstruction Company Ltd. was substituted as the Financial Creditor (FC) through an Assignment Agreement dated 29.09.2021. The petition seeks to recover outstanding dues from the Corporate Debtor (CD).

## Facts

Bank of India, the original Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against National Steel & Agro Industries Ltd., the Corporate Debtor, due to non-payment of outstanding dues. An Assignment Agreement dated 29.09.2021 led to JM Financial Asset Reconstruction Company Ltd. being substituted as the Financial Creditor. An Inter Se Agreement for credit facilities was executed on 26.05.2014 among IDBI Bank Ltd Consortium, State Bank of India, and other banks, including Bank of India, and the Corporate Debtor. The IDBI Bank Ltd Consortium had sanctioned Rs. 1431,05,00,000 to the Corporate Debtor, with the Original Lender sanctioning Rs. 125,00,00,000. The amount claimed to be in default as of the

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## Issues and analysis

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

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Corporate Debtor (CD) contested the petition's maintainability, alleging that the

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**Interpretation:** The interpretation of Section 7 involves determining whether the financial

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**Application:** In this case, the Tribunal determined that the FC had provided sufficient

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## Parties

- **Judges:** P.N. Deshmukh…; K.K. V…
- **Appellants:** JM Financial…
- **Respondents:** National Steel &…; Devesh Juvekar…

## Timeline

- **2014-05-26 — Inter Se Ag…**: An Inter Se Agreement for credit facilities was executed among IDBI Bank Ltd Consortium,…
- **2018-07-02 — Default Adm…**: The Corporate Debtor admitted that an amount of Rs 114.34 crores as principal amount was…

## 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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