# In the matter of Siddhbali Steel & Strips Private Limited C.P. No. 372-IBC-MB-2021

> NCLT judgment dated 2023-02-27. Citation: TCN-2023-NCLT-04446. Rahuraj Steel Traders Private Limited filed a Company Petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 27 Feb 2023
- **Citation:** TCN-2023-NCLT-04446
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/siddhbali-steel-strips-private-limited-cp-no-372-ibc-mb-2021-18608d60

## Summary

### Background

Rahuraj Steel Traders Private Limited filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Siddhbali Steel and Strips Private Limited. The petitioner alleged that the corporate debtor defaulted on a payment of Rs. 1,70,00,000/- along with interest at 10% per annum from 25.02.2016 till 30.11.2019, and further interest till the date of realization. The petitioner and the corporate debtor are in the same industry, and the corporate debtor approached the petitioner for financial assistance. The corporate debtor requested a loan of Rs. 2 crores, which was later agreed upon as Rs. 1,70,00,000/- with compound interest.

## Facts

Rahuraj Steel Traders Private Limited (the Petitioner), engaged in manufacturing iron and steel, sought to initiate Corporate Insolvency Resolution Process (CIRP) against Siddhbali Steel and Strips Private Limited (the Corporate Debtor). The Corporate Debtor, also in the same industry, requested financial assistance from the Petitioner. On 15.12.2015, the Corporate Debtor requested a loan of Rs. 2 crores, agreeing to repay with 8% interest by December 2019. The Petitioner, on 29.12.2015, agreed to loan Rs. 1,70,00,000 with 12% compound interest, repayable by 31st March 2019. On 10.01.2016, the Corporate Debtor requested a simple interest rate of 10%, repayable by 31st March 2019, which the Petitioner accepted on 25.01.2016. The Petitioner lent Rs. 1,70,00,000 on

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repayment …

**Ratio:** The legal principle is that a default in repayment of a financial debt is a prerequisite

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**Reasoning:** The court relied on the documents submitted, including letters and emails, which showed

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**Interpretation:** The interpretation is that a clear admission of debt and failure to repay,

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**Application:** The court applied this principle to the facts by noting the Corporate Debtor's

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## Parties

- **Judges:** Kuldip Kumar…; ANURADHA SANJAY…
- **Appellants:** Rahuraj Steel…
- **Respondents:** Siddhbali Steel…; Rishabh M…

## Timeline

- **2015-12-15 — Corporate Debtor…**: The Corporate Debtor requested the Petitioner to loan an amount of Rs. 2 crores with 8%…
- **2015-12-29 — Petitioner Agrees to…**: The Petitioner agreed to loan Rs. 1,70,00,000 with 12% compound interest, repayable by…

## 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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