# In the matter of Schifflies India Ltd. C.P. (IB) - 599 (PB)-2022

> NCLT judgment dated 2022-10-21. Citation: TCN-2022-NCLT-00628. The State Bank of India (SBI), acting as the Financial Creditor (FC), filed an application…

- **Court:** NCLT
- **Order date:** 21 Oct 2022
- **Citation:** TCN-2022-NCLT-00628
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/schifflies-india-ltd-cp-ib-599-pb-2022-51dff241

## Summary

### Background

The State Bank of India (SBI), acting as the Financial Creditor (FC), filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Schiffilies India Ltd., the Corporate Debtor (CD), due to a default in repayment of Rs. 68,74,84,065.70 as of 06.05.2022. The application sought the declaration of a moratorium and the appointment of an Interim Resolution Professional (IRP).

## Facts

Schiffilies India Ltd. (Corporate Debtor) defaulted on a payment of Rs. 68,74,84,065.70 to State Bank of India (Financial Creditor) as of 06.05.2022. The Corporate Debtor had initially obtained credit facilities from the Financial Creditor in May 2010, with a credit limit of Rs. 17 Crores, which was subsequently enhanced to Rs. 27.25 Crores in December 2011. The Corporate Debtor failed to maintain financial discipline, leading to its account being classified as NPA on 30.06.2013. The Financial Creditor issued Letters/Notices of Irregularities and a Demand Notice under Section 13(2) of the SARFAESI Act, 2002. The Corporate Debtor also made One-Time Settlement (OTS) proposals, which were not accepted by the Financial Creditor. The Financial Creditor initiated recovery

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** The Adjudicating Authority only needs to be satisfied on the existence of debt and

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**Reasoning:** The Adjudicating Authority considered the documents placed on record by the Financial

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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 found that the Financial Creditor had provided

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** State Bank of…
- **Respondents:** SCHIFFLIES INDIA…

## Timeline

- **2010-05-01 — CD Approached FC for…**: The Corporate Debtor approached the Financial Creditor requesting for sanction of various…
- **2010-10-20 — Sanction Lette…**: The Financial Creditor sanctioned various credit facilities to the Corporate Debtor with…

## 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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