# In the matter of Samvid Steels Private Limited

> NCLT judgment dated 2024-04-17. Citation: TCN-2024-NCLT-01698. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 17 Apr 2024
- **Citation:** TCN-2024-NCLT-01698
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/samvid-steels-private-limited-584f026a

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Kataria Automobiles Private Limited (Financial Creditor) to initiate the Corporate Insolvency Resolution Process (CIRP) against Samvid Steels Private Limited (Corporate Debtor). The Corporate Debtor had availed financial assistance from Punjab and Sindh Bank, which became irregular, leading to its classification as a Non-Performing Asset. The Corporate Debtor entered into an OTS with the bank, which failed. Subsequently, the Corporate Debtor approached the Financial Creditor for a loan of Rs. 4,00,00,000/-, and a Memorandum of Understanding (MoU) was executed on 01.06.2019. The Financial Creditor disbursed the loan amount in installments. The Corporate Debtor executed

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## Facts

Kataria Automobiles Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Samvid Steels Private Limited (Corporate Debtor). The Corporate Debtor had initially availed financial assistance from Punjab and Sindh Bank, which became a Non-Performing Asset. An OTS with Punjab and Sindh Bank failed. Subsequently, the Corporate Debtor approached the Financial Creditor for a loan of Rs. 4,00,00,000/-. A Memorandum of Understanding (MoU) was executed on 01.06.2019, and the Financial Creditor disbursed Rs. 2,00,00,000/- on 11.06.2019, Rs. 1,00,00,000/- on 29.06.2019, and Rs. 1,00,00,000/- on 12.07.2019. The Corporate Debtor executed a promissory

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## Issues and analysis

### Issue 1: Whether the application 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 court considered the submissions and documents annexed and found that the debt was

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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**Application:** The court applied Section 7 to the facts of the case, noting that the Financial

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## Parties

- **Judges:** Chitra Ha…; Velamur G Venkata…
- **Appellants:** Kataria Automobile…
- **Respondents:** Samvid Steels…

## Timeline

- **1992-10-14 — Incorporation of…**: Samvid Steels Private Limited…
- **2019-06-01 — MoU Exec…**: Corporate Debtor entered into a MoU with the Financial Creditor for financial assistance…

## 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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