# In the matter of Shree Geeta Textile Mills Private Limited

> NCLT judgment dated 2024-11-13. Citation: TCN-2024-NCLT-00242. The case involves an application filed by Bank of India under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 13 Nov 2024
- **Citation:** TCN-2024-NCLT-00242
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shree-geeta-textile-mills-private-limited-5417efd3

## Summary

### Background

The case involves an application filed by Bank of India under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Shree Geeta Textile Mills Private Limited due to a default amount of Rs. 56.38 crores. The date of default was stated as 31.03.2019. The applicant, Bank of India, is a bank incorporated under the Companies Act, 1956. The respondent, Shree Geeta Textile Mills Private Limited, is a private limited company. The applicant and Bank of Baroda had granted the respondent various credit facilities aggregating to Rs. 56,96,00,000 and a Bank Guarantee limit of Rs. 1,75,00,000. The respondent failed to perform its repayment obligations, leading to the classification of the account as a

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## Facts

Bank of India (the applicant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Shree Geeta Textile Mills Private Limited (the respondent). The application was filed on 07.06.2023. The total default amount was Rs. 56.38 crores, comprising a principal amount of Rs. 38.74 crores and interest of Rs. 17.64 crores. The stated date of default was 31.03.2019. Bank of India, along with Bank of Baroda, had extended credit facilities to Shree Geeta Textile Mills, with Bank of India's share being Rs. 50,25,00,000, representing 80.59% of the total credit facilities. The respondent failed to meet its repayment obligations, leading to its classification as a Non-Performing

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable …

**Ratio:** The application under Section 7 of the IBC is maintainable if there is a financial debt,

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**Reasoning:** The Adjudicating Authority considered the averments made by the financial creditor, the

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** In this case, the applicant, Bank of India, demonstrated that Shree Geeta

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## Parties

- **Judges:** Chitra Ha…; KAUSHALENDRA…
- **Appellants:** Bank of…
- **Respondents:** Shree Geeta…; Shree Geeta…

## Timeline

- **1906-09-07 — Incorporation of Bank…**: Bank of India incorporated under the…
- **2008-07-30 — Incorporation of Shree Geeta Textile Mills…**: Shree Geeta Textile Mills Private Limited incorporated under the provisions of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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