# In the matter of SRI NAGAKRISHNA CHEMICALS LIMITED

> NCLT judgment dated 2025-08-05. Citation: TCN-2025-NCLT-01189. Madhya Pradesh Financial Corporation filed a company petition under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 5 Aug 2025
- **Citation:** TCN-2025-NCLT-01189
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-hyderabad/sri-nagakrishna-chemicals-limited-5acf5881

## Summary

### Background

Madhya Pradesh Financial Corporation filed a company petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Sri Naga Krishna Chemicals Ltd. for non-payment of dues amounting to Rs. 7,95,72,029/- as of 18.07.2017.

## Facts

Madhya Pradesh Financial Corporation sanctioned Rs.7,50,00,000/- to Sri Naga Krishna Chemicals Ltd. as per the sanction letter dated 24.02.2009.

Rs.6,75,00,000/- were disbursed to the Corporate Debtor between 25.05.2009 and 20.09.2010.

The Corporate Debtor executed loan agreements and a memorandum of deposit of title deeds for equitable mortgage.

The Corporate Debtor defaulted on 01.01.2011, and the account was classified as NPA on 01.04.2011.

The Financial Creditor issued a recall notice dated 22.04.2024.

The Corporate Debtor submitted One-Time Settlement (OTS) proposals, which were rejected by the Financial Creditor.

As of 18.07.2017, the total outstanding amount was Rs.7,95,72,029/-.

The Financial Creditor proposed Mr. Madasa Kumar as the Interim Resolution Professional.

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## Issues and analysis

### Issue 1: Whether there is a 'Financial Debt' due and payable by the Corporate Debtor to the Financial …

**Ratio:** Section 5(8) of the IBC defines 'financial debt' as a debt along with interest, if any,

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**Reasoning:** The Adjudicating Authority examined the loan agreements, ledger statements, and financial

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**Interpretation:** The credit facilities availed by the Corporate Debtor from the Financial

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**Application:** The Adjudicating Authority concluded that the Corporate Debtor had availed a

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## Parties

- **Judges:** Rammurti Ku…; Man Mohan…
- **Appellants:** Madhya Pradesh…
- **Respondents:** Naga Krishna…; M/s. Sri Nagakrish…
- **Other parties:** Cherukuri…; Medi Ya…
- **Advocates:** N.V.Pruthv…; Sachin S…

## Timeline

- **2009-02-24 — Sanction…**: Madhya Pradesh Financial Corporation sanctioned Rs.7,50,00,000/- to Sri Naga Krishna…
- **2009-05-25 — Disburse…**: Rs.6,75,00,000/- were disbursed to the Corporate…

## 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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