# In the matter of Yashasvi Yarns Limited CP (IB) No. 209-NCLT-AHM-2021

> NCLT judgment dated 2022-04-26. Citation: TCN-2022-NCLT-03053. The case involves an application filed by State Bank of India (SBI), the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 26 Apr 2022
- **Citation:** TCN-2022-NCLT-03053
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/yashasvi-yarns-limited-cp-ib-no-209-nclt-ahm-2021-7a9668d9

## Summary

### Background

The case involves an application filed by State Bank of India (SBI), the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Yashasvi Yarns Limited, the Corporate Debtor. SBI, through its Assistant General Manager & Case Lead Officer, Mr. Rajendra Dahat, filed the application due to the Corporate Debtor's failure to fulfill its obligation to repay the debt. The Corporate Debtor is a company limited by shares incorporated on 04.11.1993. SBI had first sanctioned and disbursed credit facilities to the Corporate Debtor in 2005, which were subsequently renewed and enhanced. Other banks, including The Shamrao Vithal Co-operative Bank Limited, The South Indian Bank Ltd., 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 Yashasvi Yarns Limited. SBI had sanctioned and disbursed credit facilities to Yashasvi Yarns Limited in 2005, which were subsequently renewed and enhanced. Other banks, including The Shamrao Vithal Co-operative Bank Limited, The South Indian Bank Ltd., and Canara Bank, were also involved in providing credit facilities. The credit facilities were restructured in 2014/2015 under JLF mechanism by the SBI Consortium and the Corporate Debtor. The total amount of debt granted by the applicant is Rs. 77.10 Crores. The Corporate Debtor acknowledged the debt owed to the Financial Creditors and

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor, State Bank of India, under Section 7 of …

**Ratio:** Section 7(5) of the Insolvency and Bankruptcy Code (IBC), 2016, stipulates that the

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**Reasoning:** The NCLT considered the admission of debt by the Corporate Debtor, the documents

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

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**Application:** In this case, the Corporate Debtor admitted the debt, and the Financial

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## Parties

- **Judges:** DEEPTI M…; Ajai Das Me…
- **Appellants:** State Bank of…
- **Respondents:** Yashasvi Yarns…

## Timeline

- **2005-01-01 — Initial Credit…**: SBI first sanctioned and disbursed credit…
- **2014-01-01 — Credit Facilities…**: Credit facilities were restructured…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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