# In the matter of Sri Ganga Steel Enterprises Pvt.  Ltd. C.P. (IB) No. 164-7-HDB-2022

> NCLT judgment dated 2022-10-31. Citation: TCN-2022-NCLT-00576. The case involves an application filed by M/S Ram Chandran Traders Pvt. Ltd. (Financial…

- **Court:** NCLT
- **Order date:** 31 Oct 2022
- **Citation:** TCN-2022-NCLT-00576
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sri-ganga-steel-enterprises-pvt-ltd-cp-ib-no-164-7-hdb-2022-a97b9bc8

## Summary

### Background

The case involves an application filed by M/S Ram Chandran Traders Pvt. Ltd. (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/S Sri Ganga Steel Enterprises Pvt. Ltd. (Corporate Debtor). The Financial Creditor alleged a default of over Rupees One Crore by the Corporate Debtor.

## Facts

M/S Ram Chandran Traders Pvt. Ltd. (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/S Sri Ganga Steel Enterprises Pvt. Ltd. (Corporate Debtor). The Financial Creditor and Corporate Debtor are both companies incorporated under the Companies Act, 1956. The Financial Creditor extended funds to the Corporate Debtor, which was formalized in a loan agreement dated 2019-06-10. As per the agreement, the Corporate Debtor was to pay Rs. 3,53,11,686/- in 10 equal quarterly installments. The Corporate Debtor failed to make payments, leading to a total outstanding amount of Rs. 4,85,76,422/-, including interest. The Corporate Debtor was set ex-parte after failing to appear before the Tribunal despite notices. The

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## Issues and analysis

### Issue 1: Whether the instant Application under Section 7 of the Code, 2016, should be admitted and CIRP be …

**Ratio:** The moment the adjudicating authority is satisfied that a default has occurred, the

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**Reasoning:** The court found that the Financial Creditor had proved the existence of a financial debt

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**Interpretation:** The court interpreted Section 7 of the IBC and the Supreme Court's judgment in

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**Application:** The court applied the ratio to the facts of the case, finding that the

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## Parties

- **Judges:** Venkata Ramakrishn…; Satya Ranjan…
- **Appellants:** Ram Chandran…
- **Respondents:** Ganga Steel…

## Timeline

- **2019-06-10 — Loan Agre…**: Loan agreement between Financial…
- **2019-07-01 — Commencement of…**: Installments due to be paid by…

## 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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