# In the matter of Shresht Industries Private Limited CP (IB) No. 160-7-HDB-2022

> NCLT judgment dated 2022-09-09. Citation: TCN-2022-NCLT-01118. Canara Bank Limited, the Financial Creditor, filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 9 Sept 2022
- **Citation:** TCN-2022-NCLT-01118
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shresht-industries-private-limited-cp-ib-no-160-7-hdb-2022-657baa58

## Summary

### Background

Canara Bank Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/S Shresht Industries Private Limited, the Corporate Debtor. The Financial Creditor alleged a default of a financial debt exceeding Rupees One Crore by the Corporate Debtor. The Corporate Debtor was set ex-parte due to failure to appear before the Tribunal despite substituted service through paper publications in 'The Times of India' and 'Nava Telangana'.

## Facts

Canara Bank Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/S Shresht Industries Private Limited, the Corporate Debtor, alleging a default of over Rupees One Crore. The Corporate Debtor is a private limited company incorporated on 23.12.2013, engaged in the manufacture and supply of drinking water purification systems. The Financial Creditor had granted a vehicle loan and approved the takeover of existing WC limits of OCC with enhancement to OCC/ODBD limit. The Corporate Debtor executed various loan documents, including a Demand Promissory Note and a Common Hypothecation Agreement. The Corporate Debtor also executed a series of acknowledgements of debt and security towards different amounts on

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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 of India in Innoventive Industries Ltd v. ICICI Bank & Anr.

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**Reasoning:** The Adjudicating Authority found that the Financial Creditor had fulfilled all the

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**Interpretation:** The legal principle established by the Supreme Court in Innoventive Industries

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**Application:** In this case, the Adjudicating Authority applied the ratio from Innoventive

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## Parties

- **Judges:** TELAPROLU…; Veera Brahma Rao…
- **Appellants:** Canara Bank…
- **Respondents:** M/S Shresht…

## Timeline

- **2013-12-23 — Incorporation of…**: M/S Shresht Industries…
- **2017-01-25 — Sanction Memorandum for…**: Financial Creditor granted a…

## 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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