# In the matter of Sri Umamaheswara Paper Private Limited

> NCLT judgment dated 2025-03-03. Citation: TCN-2025-NCLT-00417. Andhra Pradesh State Financial Corporation (APSFC) filed a Company Petition under Section 7 of…

- **Court:** NCLT
- **Order date:** 3 Mar 2025
- **Citation:** TCN-2025-NCLT-00417
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sri-umamaheswara-paper-private-limited-341dbab4

## Summary

### Background

Andhra Pradesh State Financial Corporation (APSFC) filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against M/s. Sri Umamaheswara Paper Private Limited, alleging default in repayment of a financial debt exceeding one crore rupees. The petitioner, APSFC, claimed that the corporate debtor had availed a term loan facility of Rs 360 Lakhs, which was duly disbursed. However, the corporate debtor defaulted on the repayment terms, leading to the account being classified as NPA on 31.03.2012. Despite acknowledging the debt through various letters, including OTS (One Time Settlement) offers, the corporate debtor failed to discharge the outstanding dues. Consequently, the petitioner issued a demand notice on 30.07.2019, demanding

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## Facts

Andhra Pradesh State Financial Corporation (APSFC) extended a term loan facility of Rs 360 Lakhs to M/s. Sri Umamaheswara Paper Private Limited for business purposes, as evidenced by a sanction letter dated 24.07.2007. The loan amount was duly disbursed to the corporate debtor. The corporate debtor defaulted on the repayment terms, leading to the account being classified as NPA on 31.03.2012. The corporate debtor acknowledged the debt through a debt acknowledgement letter dated 09.01.2015 and subsequent OTS letters dated 02.11.2018, 27.12.2020, 09.12.2021, and 19.08.2023. Despite acknowledging the debt, the corporate debtor failed to make the payments. APSFC issued a demand notice on 30.07.2019, demanding payment of Rs. 36,83,42,143.70/- along with interest as on

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## Issues and analysis

### Issue 1: Whether the petitioner, Andhra Pradesh State Financial Corporation (APSFC), has established the …

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

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**Reasoning:** The Tribunal perused the documents submitted by the petitioner, including the sanction

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**Interpretation:** The existence of a financial debt is established when the creditor provides

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**Application:** In this case, the petitioner provided sufficient evidence, including the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Andhra Pradesh…
- **Respondents:** Umamaheswara…; M/s. Sri Umamahesw…

## Timeline

- **2007-07-24 — Sanction…**: Sanction letter for term loan facility of Rs…
- **2012-03-31 — Account Classified as…**: The account of the Corporate Debtor was…

## 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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