# In the matter of Sristi Hospitality Private Limited C.P. 518 OF 2022

> NCLT judgment dated 2023-02-27. Citation: TCN-2023-NCLT-04448. The case involves a Company Petition filed by Saraswat Co-operative Bank Limited under Section…

- **Court:** NCLT
- **Order date:** 27 Feb 2023
- **Citation:** TCN-2023-NCLT-04448
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sristi-hospitality-private-limited-cp-518-of-2022-67c36f96

## Summary

### Background

The case involves a Company Petition filed by Saraswat Co-operative Bank Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Sristi Hospitality Private Limited, the Corporate Debtor, due to an unresolved financial debt of Rs. 28,30,42,444.42/-. The Corporate Debtor had approached the bank for financial assistance, which was granted in the form of a term loan and overdraft facility. The Corporate Debtor failed to repay the outstanding amount, leading the bank to classify the account as a Non-Performing Asset (NPA).

## Facts

Saraswat Co-operative Bank Limited (the Petitioner) filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Sristi Hospitality Private Limited (the Corporate Debtor). The Corporate Debtor had approached the Petitioner for financial assistance and was granted a term loan of Rs. 21,00,00,000/- and an overdraft facility of Rs. 50,00,000/-, aggregating to Rs. 21,50,00,000/-. This was sanctioned via a letter dated 31.10.2017. The Corporate Debtor resolved to secure these credit facilities in a board meeting on 01.11.2017. A loan agreement was executed on 31.12.2017, and a charge was registered on 16.01.2018. A letter of guarantee was also issued on 30.12.2017. The Corporate

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## Issues and analysis

### Issue 1: Whether the Petitioner has successfully demonstrated the existence of a debt and default on the …

**Ratio:** The legal principle applied is that under Section 7 of the Insolvency and Bankruptcy

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**Reasoning:** The court reasoned that the Petitioner had presented sufficient evidence, including the

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial creditor

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**Application:** The ratio and reasoning were applied to the facts of the case, where the

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## Parties

- **Judges:** Kuldip Kumar…; ANURADHA SANJAY…
- **Appellants:** Saraswat Co-operat…
- **Respondents:** M/s. Sristi…

## Timeline

- **2017-10-31 — Sanction Lett…**: Sanction letter issued by the Petitioner…
- **2017-11-01 — Board Me…**: Respondent's Board of Director's meeting where it was resolved to secure the credit…

## 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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