# In the matter of Swarna Hospital Private Limited CP (IB) No. 7-CB-2023

> NCLT judgment dated 2023-05-08. Citation: TCN-2023-NCLT-03458. State Bank of India (SBI), a financial creditor, filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 8 May 2023
- **Citation:** TCN-2023-NCLT-03458
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/swarna-hospital-private-limited-cp-ib-no-7-cb-2023-9ef9806d

## Summary

### Background

State Bank of India (SBI), a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Swarna Hospital Private Limited, the corporate debtor, for defaulting on a financial debt of ₹28,36,53,094 as of October 31, 2022. The corporate debtor had availed term loans and fund-based working capital limits totaling ₹17.20 crore from SBI, secured by various agreements and a first paripassu charge. The loan account became irregular and was classified as NPA on July 25, 2014. SBI initiated recovery proceedings before the Debts Recovery Tribunal (DRT), Cuttack, which are still pending. The corporate debtor acknowledged the debt and requested restructuring and

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## Facts

State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Swarna Hospital Private Limited for a default of ₹28,36,53,094 as of October 31, 2022. Swarna Hospital had availed term loans and fund-based working capital limits totaling ₹17.20 crore from SBI. The loan was secured by agreements and a first paripassu charge. The account was classified as NPA on July 25, 2014. SBI initiated recovery proceedings before the Debts Recovery Tribunal (DRT), Cuttack. Swarna Hospital acknowledged the debt and requested restructuring and offered OTS proposals. The Corporate Debtor argued the application was time-barred, as the default occurred on March 31, 2014,

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India under Section 7 of the IBC is barred by …

**Ratio:** Section 18 of the Limitation Act provides for the extension of the limitation period

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**Reasoning:** The NCLT considered the acknowledgements of debt by the corporate debtor in its

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**Interpretation:** Section 18 of the Limitation Act allows for the extension of the limitation

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**Application:** The NCLT found that the corporate debtor had acknowledged the debt in its

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## Parties

- **Judges:** P. Moha…; Satya Ranjan…
- **Appellants:** State Bank of…
- **Respondents:** Swarna Hospital…

## Timeline

- **2014-03-31 — Date of D…**: The Corporate Debtor…
- **2014-07-25 — Account Classified as…**: The loan 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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