# In the matter of Sarita Steel & Power Limited

> NCLT judgment dated 2024-12-19. Citation: TCN-2024-NCLT-00027. UCO Bank, a financial creditor, filed a company petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 19 Dec 2024
- **Citation:** TCN-2024-NCLT-00027
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sarita-steel-amp-power-limited-ff840a9b

## Summary

### Background

UCO Bank, a financial creditor, filed a company petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Sarita Steel & Power Limited, the corporate debtor, seeking initiation of the corporate insolvency resolution process (CIRP). The claim was based on a default of Rs. 178,00,81,925/-, including principal and interest. Sarita Steel & Power Limited was a corporate guarantor for the principal borrower, M/s. Ankit Metal and Power Ltd, which had been granted credit facilities by UCO Bank in 2010. The account of the principal borrower was classified as a Non-Performing Asset (NPA) on 28.08.2014. UCO Bank had initiated proceedings against the principal borrower and corporate guarantors, issuing a demand notice under Section 13(2) of the

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## Facts

UCO Bank extended credit facilities to M/s. Ankit Metal and Power Ltd in 2010, with M/s. Sarita Steel & Power Limited acting as the corporate guarantor. The principal borrower defaulted on these facilities, leading to the account being classified as a Non-Performing Asset (NPA) on 28.08.2014. UCO Bank issued a demand notice under Section 13(2) of the SARFAESI Act, 2002, on 07.04.2018, for outstanding dues of Rs. 105,45,00,000/-. The total amount claimed to be in default was Rs. 178,00,81,925/-, including a principal amount of Rs. 88,01,53,707/- and interest of Rs. 89,99,28,217/- as of 31.05.2022. The date of default was claimed as 31.05.2014. The financial creditor received several payments from the principal borrower between 2014 and 2018, with the last payment on

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## Issues and analysis

### Issue 1: Whether the company petition filed by UCO Bank under Section 7 of the Insolvency and Bankruptcy …

**Ratio:** The ratio is based on the settled principle that when a default occurs, and a debt

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**Reasoning:** The court reasoned that the petition was complete in all respects, not barred by

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**Interpretation:** This interprets Section 7 of the I&B Code to mean that if the adjudicating

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**Application:** The court applied this to the facts by finding that UCO Bank had demonstrated a

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## Parties

- **Judges:** BIDISHA BA…; SHRI. BALRA…
- **Respondents:** M/S. SARITA STEEL…
- **Advocates:** Santosh K…; Rituparna…; +5 more

## Timeline

- **2010-01-01 — Credit Facilities…**: UCO Bank granted credit facilities…
- **2014-05-31 — Date of D…**: The date of default…

## 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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