# Axis Bank Ltd. v. Zenith Steel Industries Pvt. Ltd.

> Axis Bank Ltd. v. Zenith Steel Industries Pvt. Ltd. — detailed IBC case summary, facts, issues, and ratio decidendi.

- **Court:** NCLT
- **Order date:** 15 Mar 2024
- **Citation:** IBC-2024-NCLT-000001
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-new-delhi/axis-bank-ltd-v-zenith-steel-industries-pvt-ltd-71646

## Summary

### Background

Axis Bank Ltd. instituted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Zenith Steel Industries Pvt. Ltd., a mid-sized integrated steel manufacturer operating plants in Haryana and Uttar Pradesh. The financial creditor claimed an aggregate default of Rs. 142.87 crore comprising term loan facilities, cash credit limits, and interest thereon that had remained unpaid for more than ninety days as per RBI norms.

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## Facts

Zenith Steel Industries Pvt. Ltd. was incorporated in 2008 and operated rolling mill and galvanizing lines with installed capacity of approximately 4.5 lakh tonnes per annum. Axis Bank sanctioned a consortium-led facility in 2016 which was later novated to Axis as sole lender for certain tranches.

Between 2019 and 2022, the company faced severe headwinds from volatile coking coal prices, supply chain disruptions, and labour unrest at its Ghaziabad unit. Quarterly financial statements reflected erosion in net worth though operations continued on a reduced shift basis.

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## Issues and analysis

### Issue 1: Whether the financial creditor established default in repayment of financial debt for the purposes…

**Ratio:** At the admission stage under Section 7, the adjudicating authority examines whether a…

**Reasoning:** The Tribunal reviewed contemporaneous account ledgers showing unpaid instalments beyond…

**Interpretation:** The expression "default" under Section 3(12) read with Section 7 imports…

**Application:** Default was held established;…

## Parties

- **Judges:** Hon'ble Shri Ram…; Venugop…
- **Appellants:** Axis Ban…
- **Respondents:** Zenith Steel…
- **Other parties:** Mr. Rajesh Kumar…
- **Advocates:** Mukul Ro…; Menaka Gur…

## Timeline

- **18 March 2023 — NPA classif…**: Axis Bank classifies Zenith Steel accounts as non-performing after sustained overdue…
- **12 January 2024 — Section 7 application…**: Financial creditor approaches NCLT New Delhi with default certificate and supporting loan…

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