# In the matter of SUDRADH CONSTURCTIONS PVT LTD

> NCLT judgment dated 2024-08-21. Citation: TCN-2024-NCLT-00770. The case involves a petition filed by Unity Small Finance Bank Ltd, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 21 Aug 2024
- **Citation:** TCN-2024-NCLT-00770
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sudradh-consturctions-pvt-ltd-6ef4d427

## Summary

### Background

The case involves a petition filed by Unity Small Finance Bank Ltd, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Sudradh Construction Private Limited, the Corporate Debtor, due to non-payment of a financial debt amounting to Rs. 2,02,59,92,008.70, inclusive of contractual interest, penal interest, costs, and expenses. The Corporate Debtor had availed loan facilities from the Financial Creditor, which were later classified as Non-Performing Asset (NPA) due to irregular payments and defaults. The Financial Creditor initiated measures under the SARFAESI Act and issued demand notices, but the Corporate Debtor failed to respond. The Corporate Debtor argued that the

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## Facts

Unity Small Finance Bank Ltd (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Sudradh Construction Private Limited (Corporate Debtor). The Financial Creditor claimed a financial debt of Rs. 2,02,59,92,008.70, inclusive of contractual interest, penal interest, costs, and expenses. The Corporate Debtor had availed loan facilities from the Financial Creditor, which were later classified as Non-Performing Asset (NPA) on 31.03.2013 due to irregular payments and defaults. The Financial Creditor initiated measures under the SARFAESI Act and issued demand notices dated 02.09.2020 under Section 13(2) of the SARFAESI Act, but the Corporate Debtor failed to

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor is maintainable under Section 7 of the …

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

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**Reasoning:** The Tribunal found that the Financial Creditor had provided sufficient evidence to prove

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**Interpretation:** Section 7 provides the mechanism for financial creditors to trigger the

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**Application:** The Financial Creditor demonstrated that the Corporate Debtor had defaulted on

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## Parties

- **Judges:** Reeta K…; Madhu S…
- **Appellants:** Laxmichand Damji…
- **Respondents:** Sudradh Constructi…; UNITY SMALL…
- **Advocates:** Manoj M…; Ashwini…

## Timeline

- **2010-09-02 — Demand N…**: Financial Creditor issued a Demand…
- **2012-12-22 — Sanction…**: Financial Creditor issued a Sanction…

## 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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