# In the matter of Sintex Plastics Technology Limited C.P. (I.B.) No.175-NCLT-AHM-2022

> NCLT judgment dated 2023-02-21. Citation: TCN-2023-NCLT-04504. The case involves an application filed by Asset Reconstruction Company (India) Limited…

- **Court:** NCLT
- **Order date:** 21 Feb 2023
- **Citation:** TCN-2023-NCLT-04504
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sintex-plastics-technology-limited-cp-ib-no175-nclt-ahm-2022-92acb49c

## Summary

### Background

The case involves an application filed by Asset Reconstruction Company (India) Limited (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Sintex Plastics Technology Limited (Corporate Debtor). The application is based on an outstanding amount of Rs. 350,28,00,550/-, comprising Rs. 215,77,95,794/- as principal and Rs. 134,50,04,756/- towards interest. The Corporate Debtor had provided a guarantee for credit facilities extended by Axis Bank Limited to Sintex BAPL Limited (SBL). SBL defaulted, leading the Financial Creditor to invoke the Deed of Guarantee. Prior CIRP proceedings against SBL had a complex history, including initial admission, withdrawal, and

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## Facts

1. Asset Reconstruction Company (India) Limited filed an application under Section 7 of the IBC to initiate CIRP against Sintex Plastics Technology Limited due to an outstanding debt of Rs. 350,28,00,550/-.
2. The debt comprises Rs. 215,77,95,794/- as principal and Rs. 134,50,04,756/- towards interest at 8.55% per annum and penal interest at 2% per annum from 01/04/2022 to 06/06/2022.
3. Axis Bank Limited had sanctioned credit facilities to Sintex BAPL Limited (SBL) for Rs. 250,00,00,000/- vide a sanction letter dated 11/09/2017, pursuant to a facility agreement dated 13/09/2017. The facility was renewed on 05/02/2019.
4. Sintex Plastics Technology Limited executed a Deed of Guarantee on 20/12/2017, in favor of the Financial Creditor, securing the credit facility granted

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the IBC for initiating …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The Adjudicating Authority considered the documents and submissions made by the Financial

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

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**Application:** The Financial Creditor, being the assignee of Axis Bank's debt, has the right

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## Parties

- **Judges:** Madan B.…; Mr.Kaushalendra…
- **Appellants:** Asset Reconstructi…
- **Respondents:** Sintex Plastics…; Sintex Plastics…

## Timeline

- **2017-09-11 — Sanction…**: Axis Bank Limited sanctioned credit facilities to Sintex BAPL Limited (SBL) for Rs.…
- **2017-09-13 — Facility Ag…**: Facility agreement between Axis…

## 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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