# 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-01113. The case involves an application filed by Canara Bank Limited (Financial Creditor) under…

- **Court:** NCLT
- **Order date:** 9 Sept 2022
- **Citation:** TCN-2022-NCLT-01113
- **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-a942753c

## Summary

### Background

The case involves an application filed by Canara Bank Limited (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/S Shresht Industries Private Limited (Corporate Debtor). The Financial Creditor alleges a default of over 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 via paper publication.

## Facts

Canara Bank Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/S Shresht Industries Private Limited (Corporate Debtor) for defaulting on a financial debt exceeding Rupees One Crore. The Corporate Debtor is a private limited company engaged in manufacturing and supplying drinking water purification systems. The Financial Creditor had granted various credit facilities to the Corporate Debtor, including a vehicle loan, working capital demand loan, and overdraft facilities. The Corporate Debtor executed several documents, including sanction memorandums, letters of undertaking, and acknowledgements of debt. The Corporate Debtor failed to repay installments as per the agreed repayment schedule, leading to

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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 ratio is based on the Supreme Court's ruling in Innoventive Industries Ltd v. ICICI

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**Reasoning:** The Adjudicating Authority reasoned that the Financial Creditor's application was

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**Interpretation:** The interpretation of Section 7 of the IBC, as clarified by the Supreme Court,

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**Application:** The ratio and reasoning were applied to the facts of the case, where the

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## Parties

- **Judges:** TELAPROLU…; Veera Brahma Rao…
- **Appellants:** M/s. 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 vehicle loan to the Corporate Debtor vide Sanction…

## 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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