# In the matter of Stainless Work Private Limited

> NCLT judgment dated 2023-11-01. Citation: TCN-2023-NCLT-00910. The case pertains to a Company Petition (CP(IB) No. 208/MB/2019) filed by Stainless Work…

- **Court:** NCLT
- **Order date:** 1 Nov 2023
- **Citation:** TCN-2023-NCLT-00910
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/stainless-work-private-limited-a88a6075

## Summary

### Background

The case pertains to a Company Petition (CP(IB) No. 208/MB/2019) filed by Stainless Work Private Limited under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor, Stainless Works Private Limited, was incorporated on 11.09.1996. The company defaulted on its financial obligations to Standard Chartered Bank, leading to the initiation of recovery proceedings under the SARFAESI Act. The Corporate Debtor then filed an application under Section 10 of the IBC to initiate CIRP.

## Facts

Stainless Work Private Limited (the Corporate Debtor) filed a petition under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process. The Corporate Debtor was incorporated on 11.09.1996. The first default occurred when the Corporate Debtor received a notice dated 24th March 2015 from Standard Chartered Bank for defaulting on repayment of Cash Credit facility and Term Loan. Subsequently, a notice dated 17th July 2015 was issued under Section 13(2) of the SARFAESI Act for recovery of INR 11,57,43,775.73/-. The Corporate Debtor again defaulted, leading to further notices under Section 13(4) of the SARFAESI Act. A One Time Settlement offer was revoked on 7th July 2017, with an outstanding amount of INR

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## Issues and analysis

### Issue 1: Whether the application filed by the Corporate Debtor under Section 10 of the Insolvency and …

**Ratio:** Section 10 of the IBC allows a corporate debtor to initiate CIRP if it has committed a

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**Reasoning:** The NCLT found that the Corporate Applicant was in default and that the application was

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**Interpretation:** Section 10 provides a mechanism for corporate debtors facing financial distress

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**Application:** The NCLT applied Section 10 and Rule 7(1) to the facts of the case, finding

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## Parties

- **Judges:** Prabhat…; V.G. B…
- **Respondents:** Stainless Work…

## Timeline

- **1996-09-11 — Incorpor…**: The Corporate Debtor, Stainless Works…
- **2015-03-24 — Default N…**: The Corporate Debtor received a notice from Standard Chartered Bank for defaulting on…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 11 — Persons not entitled to make application](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-11)

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