# In the matter of KGR Gems and Bullion Private Limited

> NCLT judgment dated 2025-11-07. Citation: TCN-2025-NCLT-01620. Kerala State Industrial Development Corporation Ltd filed a petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 7 Nov 2025
- **Citation:** TCN-2025-NCLT-01620
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-kochi/kgr-gems-and-bullion-private-limited-ca47c347

## Summary

### Background

Kerala State Industrial Development Corporation Ltd filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s KGR Gems and Bullion Private Limited for initiating the Corporate Insolvency Resolution Process (CIRP) due to a 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 the initiation of Revenue Recovery proceedings and the filing of a Section 7 petition under the IBC.

The Corporate Debtor argued that the defaults were due to delayed disbursement and sequencing errors by the Financial Creditor, constituting a breach of financing terms.

The Financial Creditor claimed that the total amount in default was Rs. 6,25,32,354/- as of 31.05.2025.

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## Issues and analysis

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

**Ratio:** The NCLT found that the executed loan agreements, deeds of hypothecation, and guarantees,

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**Reasoning:** The documents on record clearly demonstrated the existence of a financial debt and the

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**Interpretation:** The NCLT interpreted Section 7 of the IBC to require the Adjudicating Authority

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**Application:** The NCLT applied the provisions of Section 7 of the IBC to the facts of the

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## Parties

- **Judges:** Shri. Vina…; Madhu S…
- **Appellants:** Kerala State…; M/s. Kerala State…
- **Respondents:** M/s. KGR Gems and…
- **Other parties:** Mr Surendranath…; Mr Jasin…
- **Advocates:** KEVIN T…; TINU AB…

## Timeline

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