# In the matter of Shree Rangham Ispat Pvt. Ltd. CP (IB) NO.325-7-HDB-2021

> NCLT judgment dated 2022-09-26. Citation: TCN-2022-NCLT-00941. Andhra Pradesh State Financial Corporation Company Limited filed an application under Section 7…

- **Court:** NCLT
- **Order date:** 26 Sept 2022
- **Citation:** TCN-2022-NCLT-00941
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shree-rangham-ispat-pvt-ltd-cp-ib-no325-7-hdb-2021-70ddaa2d

## Summary

### Background

Andhra Pradesh State Financial Corporation Company Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Shree Rangham Ispat Pvt Ltd. The Financial Creditor claimed that the Corporate Debtor had defaulted on a term loan facility. The Corporate Debtor was declared ex-parte after failing to respond to notices, including a paper publication. The Financial Creditor submitted documents including a sanction letter, hypothecation deed, and the Corporate Debtor's audited financial statements to support its claim.

## Facts

Andhra Pradesh State Financial Corporation Company Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Shree Rangham Ispat Pvt Ltd (Corporate Debtor). The Corporate Debtor had availed a term loan facility from the Financial Creditor. The Corporate Debtor defaulted in servicing the principal and interest, leading to the account being classified as a Non-Performing Asset (NPA) since 29-06-2015. The Financial Creditor issued a notice dated 27.07.2018 demanding payment of Rs. 1230.95 lakhs. The Corporate Debtor failed to make the payment, leading the Financial Creditor to recall the loan facility. The total outstanding as of 30.06.2018 was Rs.

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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 Hon'ble Supreme Court in INNOVENTIVE INDUSTRIES LTD. Vs. ICICI BANK & ANR. held

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**Reasoning:** The Adjudicating Authority observed that the Financial Creditor had fulfilled 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:** The Financial Creditor presented evidence of a financial debt and a default.

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. VEERA BRAHMA…
- **Appellants:** Andhra Pradesh…
- **Respondents:** Shree Rangham…

## Timeline

- **2015-06-29 — Account Classified as…**: The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) due to…
- **2018-05-25 — Auditors…**: Copy of auditors report…

## 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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