# In the matter of KGR GEMS AND BULLION PRIVATE LIMITED

> NCLT judgment dated 2025-11-11. Citation: TCN-2025-NCLT-01616. The Kerala State Industrial Development Corporation Ltd filed a petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 11 Nov 2025
- **Citation:** TCN-2025-NCLT-01616
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-kochi/kgr-gems-and-bullion-private-limited-7b54235a

## Summary

### Background

The Kerala State Industrial Development Corporation Ltd filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against KGR Gems and Bullion Private Limited, citing default on loan repayments.

## Facts

Kerala State Industrial Development Corporation Ltd sanctioned three credit facilities to KGR Gems and Bullion Private Limited: a Term Loan of Rs. 500 lakhs, a Working Capital Term Loan of Rs. 150 lakhs, and a Term Loan of Rs. 200 lakhs.

The Corporate Debtor defaulted on all three loan accounts, leading to a consolidated outstanding of Rs. 6,25,32,354/- as of 31.05.2025.

The Corporate Debtor filed W.P.(C) No. 25448/2025 before the Hon'ble High Court of Kerala, challenging the invocation of the Revenue Recovery Act.

The Corporate Debtor alleged that the defaults were not genuine but arose from the Petitioner's own conduct, namely, delayed disbursement, reversal of funding sequence, and premature recall.

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## Issues and analysis

### Issue 1: Whether a financial debt exists …

**Ratio:** The existence of executed loan agreements, deeds of hypothecation, guarantees, and

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**Reasoning:** The Adjudicating Authority relied on the documents submitted by the Financial Creditor,

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**Interpretation:** The term 'financial debt' under Section 5(8) of the IBC includes any debt along

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**Application:** In this case, the loan agreements and other documents clearly established that

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## Parties

- **Judges:** SMT MADHU…; Vinay…
- **Appellants:** Kerala State…
- **Respondents:** KGR Gems and…
- **Other parties:** Surendranath…; Jasin…
- **Advocates:** SANDEEP K…; MIDHUN…; +4 more

## Timeline

- **2021-07-20 — Sanction of T…**: The Petitioner sanctioned a Term Loan of…
- **2022-03-08 — Sanction of Working…**: The Petitioner sanctioned a Working Capital Term Loan of Rs. 1.50 crore to the Corporate…

## 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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