# 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-04982. 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-04982
- **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-f50860c4

## 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. The Financial Creditor alleged that the Corporate Debtor defaulted in making payments. The Corporate Debtor is part of the Vindhyavasini Group and is involved in manufacturing steel products. The Financial Creditor had sanctioned loan facilities to the Corporate Debtor, and various agreements were entered into between them. The Corporate Debtor failed to maintain financial discipline and defaulted in repayment, leading to the account being declared a Non-Performing Asset (NPA).

## Facts

The State Bank of India (Financial Creditor) filed a petition to initiate Corporate Insolvency Resolution Process (CIRP) against Vindhyavasini Steel Corporation Private Limited (Corporate Debtor) due to default in payment. The Corporate Debtor is part of the Vindhyavasini Group and manufactures steel products. The Financial Creditor sanctioned loan facilities to the Corporate Debtor, formalized through a Letter of Arrangement dated 29th June 2011. The Corporate Debtor defaulted in repayment, leading to the account being declared a Non-Performing Asset (NPA) on 31st March 2013. The outstanding amount as of 31st May 2013 was Rs. 106.21 Crores. The Financial Creditor issued notices under the SARFAESI Act. The Corporate Debtor acknowledged the debt in balance sheets and

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## Issues and analysis

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

**Ratio:** The limitation period is extended from the date of admission of liability by the

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**Reasoning:** The Corporate Debtor admitted their liability to repay in the Compromise Letter dated

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**Interpretation:** The admission of debt by the Corporate Debtor effectively restarts the

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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 loan facilities vide Letter of Arrangement dated…

## 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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