# In the matter of SAV Steels Private Limited I.A. No. 973-KB-2022 in CP(IB) No. 208-KB-2021

> NCLT judgment dated 2022-10-28. Citation: TCN-2022-NCLT-00585. State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 28 Oct 2022
- **Citation:** TCN-2022-NCLT-00585
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sav-steels-private-limited-ia-no-973-kb-2022-in-cpib-no-208-kb-2021-958f4537

## Summary

### Background

State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against SAV Steels Private Limited. The Corporate Debtor had approached the Financial Creditor for a term loan, which was sanctioned and subsequently enhanced. Despite repeated demands, the Corporate Debtor failed to repay the dues, leading to the account being classified as a Non-Performing Asset (NPA). The Financial Creditor issued a notice under Section 13(2) of the SARFAESI Act, 2002, but the Corporate Debtor still failed to pay the outstanding dues. The Debt Recovery Tribunal (DRT) passed an order in favor of the Financial Creditor, but the debt remained unpaid. The Financial Creditor then filed the

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## Facts

State Bank of India (SBI) extended credit facilities to SAV Steels Private Limited. The initial term loan was for Rs. 28 Crores, sanctioned on September 16, 2009. This was subsequently enhanced to Rs. 34 Crores on September 13, 2010, and eventually reached Rs. 55 Crores by 2012. Despite repeated demands, SAV Steels failed to maintain the loan account, which was classified as a Non-Performing Asset (NPA) on June 29, 2013, according to RBI guidelines. SBI issued a notice under Section 13(2) of the SARFAESI Act, 2002, on November 30, 2013, but SAV Steels did not pay the outstanding dues. The Debt Recovery Tribunal (DRT) I, Kolkata, passed a final order on March 29, 2022, setting SAV Steels ex parte on August 30, 2019, and allowing the recovery of Rs. 72,93,99,998.68 plus

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India under Section 7 of the Insolvency and …

**Ratio:** A judgment and/or decree for money in favor of the Financial Creditor, passed by the DRT,

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**Reasoning:** The Hon'ble Supreme Court of India in Dena Bank vs. C. Shivakumar Reddy and Anr. held

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**Interpretation:** The Supreme Court's interpretation clarifies that a decree from DRT in favor of

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**Application:** The DRT order dated 29th March 2022 provided a fresh cause of action for the

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## Parties

- **Judges:** RohitKa…; Balraj…
- **Appellants:** State Bank of…
- **Respondents:** SAV Steels…; SAV Steels Pvt.…

## Timeline

- **2009-09-16 — Loan San…**: State Bank of India sanctioned a term loan of…
- **2010-09-13 — Credit Limit En…**: The credit limit 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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