# In the matter of Swastik Copper Pvt. Ltd.

> NCLT judgment dated 2024-09-23. Citation: TCN-2024-NCLT-00566. Union Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 23 Sept 2024
- **Citation:** TCN-2024-NCLT-00566
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/swastik-copper-pvt-ltd-cdbb1722

## Summary

### Background

Union Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/S Swastik Copper Pvt. Ltd., seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed that the Corporate Debtor had defaulted in repayment of the loan amount. The Corporate Debtor contested the application, raising issues of limitation, the validity of the NPA declaration, and the pendency of proceedings before the Debt Recovery Tribunal (DRT) and the High Court. The Corporate Debtor argued that the bank had illegally classified the loan account as NPA and had initiated proceedings under the SARFAESI Act. The Corporate Debtor also raised a counterclaim against the bank before the DRT. The Financial Creditor

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## Facts

Union Bank of India (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/S Swastik Copper Pvt. Ltd. (Corporate Debtor) seeking initiation of CIRP due to default in repayment of loan amount. The Financial Creditor had sanctioned various credit facilities to the Corporate Debtor from 2000 to 2016. The details of the loan facilities extended in 2016 include Cash Credit of Rs. 20.00 Crore, Bank Guarantee of Rs. 36.00 Crore, Inland LC/Import LC (90days) of Rs. 4.00 Crores, UBD-LC (90days) of Rs. 36.00 Crore, and UBD-LC/Import LC (90days) of Rs. 2.50 Crore. The amount claimed to be in default is Rs. 61,81,87,226.6 as on 31.10.2022 plus future interest, charges and expenses. The Corporate Debtor's account was

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, is barred by …

**Ratio:** The Hon'ble Apex Court in the case of Re: Cognizance for Extension of Limitation [Suo

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**Reasoning:** The NCLT considered the effect of the orders passed by the Hon'ble Apex Court in the Suo

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**Interpretation:** The judgment clarifies that the extension of limitation granted by the Supreme

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**Application:** In this case, the NCLT applied the principle of extended limitation to

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** Union Bank of…
- **Respondents:** M/S Swastik…

## Timeline

- **2000-01-01 — Sanction of Credit…**: Financial Creditor sanctioned various credit facilities to the Corporate Debtor from the…
- **2016-08-22 — Sanction Lett…**: Loan facilities extended in the year 2016 were…

## 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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