# In the matter of Reliable Cashew Company Private Ltd. CP(IB)-48(CHE)-2023

> NCLT judgment dated 2023-06-22. Citation: TCN-2023-NCLT-02849. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 22 Jun 2023
- **Citation:** TCN-2023-NCLT-02849
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/reliable-cashew-company-private-ltd-cpib-48che-2023-6b5f33ba

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Reliable Cashew Company Private Ltd, the Corporate Debtor, due to default in repayment of financial facilities. The Corporate Debtor had availed various credit facilities from the Applicant/Financial Creditor, creating security interests in favor of the Applicant. The account was classified as NPA on 07.10.2021. Despite requests, the Corporate Debtor failed to repay the outstanding dues. The Financial Creditor issued a notice under Section 13(2) of the SARFAESI Act, calling upon the Corporate Debtor to discharge its liabilities. The Corporate Debtor failed to pay the dues, leading to the filing of this

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## Facts

State Bank of India (SBI), the Financial Creditor, extended various credit facilities to Reliable Cashew Company Private Ltd, the Corporate Debtor. The Corporate Debtor created security interests in favor of SBI against its assets. The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) on 07.10.2021 due to irregular operation and conduct of the financial assistance/credit facilities. SBI issued a notice under Section 13(2) of the SARFAESI Act, demanding payment of Rs.73,19,22,503/- as on 06.04.2022. The Corporate Debtor failed to repay the dues. The Financial Creditor placed a record of default issued by NESL, duly authenticated, showing an outstanding and default amount of Rs.77,05,00,000/-, with the date of default recorded as 09.07.2021. The

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating …

**Ratio:** For a company to be admitted into CIRP under IBC, there must be a debt, a default within

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**Reasoning:** The Adjudicating Authority considered the pleadings and documents and found that the

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

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**Application:** The Adjudicating Authority applied the principles of Section 7 and Section 4 of

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## Parties

- **Judges:** Shri. Sanji…; Shri. Samee…
- **Appellants:** State Bank of…
- **Respondents:** RELIABLE CASHEW…; Reliable Cashew…
- **Advocates:** M.L. Ga…

## Timeline

- **1995-11-15 — Incorporation of…**: Reliable Cashew Company…
- **2021-03-31 — Assets of Corporate…**: The assets of the Corporate Debtor…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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