# 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-03277. 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-03277
- **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-bb422df6

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Bank of India (the original lender) seeking to initiate Corporate Insolvency Resolution Process (CIRP) against National Steel & Agro Industries Ltd. (the corporate debtor) due to non-payment of outstanding dues. Pending the petition, the original lender assigned its rights to JM Financial Asset Reconstruction Company Ltd. The Tribunal permitted the substitution of JM Financial as the financial creditor.

## 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 unpaid dues. The original lender assigned its rights to JM Financial Asset Reconstruction Company Ltd. An Inter Se Agreement for credit facilities was executed on 2014-05-26 among IDBI Bank Ltd Consortium, 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 account was classified as NPA on 2018-09-30, with the amount claimed to be in default being Rs. 116.91 crores as principal. The corporate debtor

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## Issues and analysis

### Issue 1: Whether the petition filed by the financial creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The Tribunal considered the submissions of both parties and examined the documents

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

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**Application:** The Tribunal applied Section 7 to the facts of the case and found that the

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## Parties

- **Judges:** P.N. Deshmukh…; K.K. V…
- **Appellants:** JM Financial…
- **Respondents:** National Steel &…
- **Advocates:** Ravi K…; Rohit G…; +5 more

## Timeline

- **2014-05-26 — Inter Se Ag…**: An Inter Se Agreement for credit facilities was executed among IDBI Bank Ltd, State Bank…
- **2018-09-30 — Account Classified as…**: The account 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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