# In the matter of Shyam Indofab Private Limited

> NCLT judgment dated 2024-08-27. Citation: TCN-2024-NCLT-00753. Indian Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 27 Aug 2024
- **Citation:** TCN-2024-NCLT-00753
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shyam-indofab-private-limited-d5126d6b

## Summary

### Background

Indian Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Shyam Indofab Private Limited, the Corporate Debtor, due to a default in payment of Rs. 34,76,29,553. The Corporate Debtor is in the business of manufacturing knitted fabric, dyeing, processing, and printing, and has availed financial facilities under a consortium of banks, including Indian Bank. The Corporate Debtor had approached the Applicant Bank for various financial facilities, including term loans and non-fund-based loans, which were sanctioned at different times. The Corporate Debtor acknowledged the debt but stated it was undergoing a financial crunch and did not object to the admission

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## Facts

1. Indian Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against M/s Shyam Indofab Private Limited.
2. The Corporate Debtor, M/s Shyam Indofab Private Limited, is engaged in the business of manufacturing knitted fabric, dyeing, processing, and printing.
3. The Corporate Debtor availed financial facilities from a consortium of banks, including Indian Bank.
4. The Corporate Debtor defaulted on a payment of Rs. 34,76,29,553 to Indian Bank.
5. Indian Bank sanctioned various financial facilities to the Corporate Debtor, including term loans and non-fund-based loans, at different times.
6. The Corporate Debtor acknowledged the debt but stated it was undergoing a financial crunch.
7. The account was declared NPA on 2021-06-04

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The court found that the applicant, Indian Bank, had submitted sufficient evidence to

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The court applied Section 7 to the facts of the case, finding that Indian Bank

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## Parties

- **Judges:** MANNI SANKARIAH…; Sanjeev R…
- **Appellants:** Indian…
- **Respondents:** M/s Shyam Indofab…

## Timeline

- **2012-01-19 — Incorporation of…**: M/s Shyam Indofab Private…
- **2013-03-11 — Sanction Letter for…**: Applicant bank approved sanctioned Term 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)

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