# In the matter of Vindhyavasini Steel Corporation Private Limited CP No. (IB) 446-MB-2020

> NCLT judgment dated 2023-01-20. Citation: TCN-2023-NCLT-04961. The State Bank of India, the Financial Creditor, filed a Company Petition under Section 7 of…

- **Court:** NCLT
- **Order date:** 20 Jan 2023
- **Citation:** TCN-2023-NCLT-04961
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vindhyavasini-steel-corporation-private-limited-cp-no-ib-446-mb-2020-a525541b

## Summary

### Background

The State Bank of India, the Financial Creditor, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Vindhyavasini Steel Corporation Private Limited, the Corporate Debtor, alleging default in payment. The Corporate Debtor had approached the Financial Creditor for financial facilities, which were sanctioned via a Letter of Arrangement dated June 29, 2011. Several agreements were entered into between the parties. The Corporate Debtor failed to maintain financial discipline and defaulted in repayment, leading to the account being declared a Non-Performing Asset (NPA) on March 31, 2013. Despite notices issued under the SARFAESI Act, the loan remained unpaid.

## Facts

The State Bank of India (Financial Creditor) sought to initiate CIRP against Vindhyavasini Steel Corporation Private Limited (Corporate Debtor) due to a default in payment. The Corporate Debtor had availed loan facilities from the Financial Creditor, sanctioned on June 29, 2011. The aggregate amount due as of May 31, 2013, was Rs. 297,87,00,000/-, including a principal amount of Rs. 106,21,00,000/-. The account was declared an NPA on March 31, 2013. The Financial Creditor issued notices under the SARFAESI Act. The Corporate Debtor acknowledged its liability in balance sheets as of March 31, 2016, and March 31, 2017, and proposed a compromise settlement on May 16, 2019, which was later rejected. The Corporate Debtor contended that the petition was filed after the expiry

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial …

**Ratio:** An admission of debt by the Corporate

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**Reasoning:** The court reasoned that the Corporate Debtor's admission of liability in the Compromise

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**Interpretation:** The interpretation of the law on limitation period is that any acknowledgement

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**Application:** The Corporate Debtor's admission of liability in the Compromise Letter dated

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## Parties

- **Judges:** P.N. Deshmukh…; Shyam Babu…
- **Appellants:** State Bank of…
- **Respondents:** Vindhyavasini…
- **Advocates:** Arjun Sa…

## Timeline

- **2011-05-18 — Request for Financial…**: The Corporate Debtor approached the Financial Creditor with a request to grant certain…
- **2011-06-29 — Letter of Arr…**: The Financial Creditor sanctioned the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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