# In the matter of Shirpur Gold Refinery Limited

> NCLT judgment dated 2024-06-24. Citation: TCN-2024-NCLT-01127. This case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 24 Jun 2024
- **Citation:** TCN-2024-NCLT-01127
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shirpur-gold-refinery-limited-3290bd4c

## Summary

### Background

This case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Prudent ARC Limited, the Financial Creditor (FC), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Shirpur Gold Refinery Limited, the Corporate Debtor (CD). The application was originally filed by Industrial Finance Corporation of India (IFCI), the Original Lender, and later assigned to Prudent ARC Limited. The alleged default pertains to a loan of Rs. 65,00,00,000/- sanctioned by the Original Lender, with a total default amount claimed to be Rs.91,98,84,982.20/- including principal and interest. The CD's account was classified as Non-Performing Asset (NPA) on 31.12.2019.

## Facts

The Industrial Finance Corporation of India (IFCI), later replaced by Prudent ARC Limited, extended a loan of Rs. 65,00,00,000/- to Shirpur Gold Refinery Limited. The loan agreement included a moratorium period of 18 months from the first disbursement date, 07.02.2018, and a repayment schedule over 6 years. The Corporate Debtor (CD) was initially regular in paying interest but started defaulting in April 2019, failing to pay interest for July 2019. The Original Lender declared the CD's account as NPA on 31.12.2019. The Original Lender issued a Loan Recall Notice on 17.03.2020, seeking repayment of Rs. 71,47,83,132.20/- along with accrued interest. Subsequently, a Demand Notice was issued on 01.07.2020, under Section 13(2) of the SARFAESI Act, claiming outstanding dues

…

## Issues and analysis

### Issue 1: Whether the date of default should be considered as 31.12.2019 (NPA declaration date) or 15.07.2019 …

**Ratio:** Default includes non-payment of principal and interest as per the Loan Agreement. The

…

**Reasoning:** The Tribunal examined the Loan Agreement and found that non-payment of principal also

…

**Interpretation:** The term 'default' is interpreted broadly to include both non-payment of

…

**Application:** The Tribunal found that the CD had defaulted in paying both principal and

…

## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** Prudent ARC…
- **Respondents:** SHIRPUR GOLD…

## Timeline

- **2017-08-09 — Letter of…**: Letter of Intent sanctioning credit…
- **2017-11-28 — Loan Agre…**: Corporate Loan…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shirpur-gold-refinery-limited-3290bd4c