# STATE BANK OF INDIA vs. SURYA FOUNDRY PRIVATE LIMITED

> NCLT judgment dated 2026-07-29. Citation: TCN-2026-NCLT-00731. State Bank of India (Financial Creditor) filed a Section 7 IBC application against Surya…

- **Court:** NCLT
- **Order date:** 29 Jul 2026
- **Citation:** TCN-2026-NCLT-00731
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-new-delhi/state-bank-of-india-vs-surya-foundry-private-limited-f4ru3

## Summary

### Background

State Bank of India (Financial Creditor) filed a Section 7 IBC application against Surya Foundry Private Limited (Corporate Guarantor) for initiating CIRP, based on a Corporate Guarantee dated 28.03.2023. The Principal Borrower, Mubarak Overseas Private Limited, defaulted on credit facilities, leading to its account being declared NPA and the invocation of the corporate guarantee. The Corporate Guarantor disputed the guarantee's validity, alleging fraud, fabrication, and lack of authorization, citing pending proceedings in various fora (DRT, EOW, High Court, NCLT).

## Facts

State Bank of India (Financial Creditor) filed an application under Section 7 of the IBC against Surya Foundry Private Limited (Corporate Guarantor) for initiating the Corporate Insolvency Resolution Process (CIRP).

The application is based on a Corporate Guarantee dated 28.03.2023, securing financial facilities extended to the Principal Borrower, Mubarak Overseas Private Limited.

The amount of default is Rs. 58,11,03,814.51/-, and the date of default is 01.01.2025.

The Principal Borrower initially availed a cash credit facility of Rs. 40 Lakhs, which was periodically renewed and enhanced, reaching a total of Rs. 65.33 Crore by March 2023.

The Corporate Guarantor executed continuing guarantee deeds and renewed equitable mortgages to secure these credit facilities.

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## Issues and analysis

### Issue 1: Whether the Applicant (State Bank of India) has established the existence of a financial debt and …

**Ratio:** The Adjudicating Authority's jurisdiction under Section 7 of the IBC is summary in

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**Reasoning:** The Financial Creditor provided records of default, sanction letters, loan documents, the

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**Interpretation:** Section 7 focuses on the existence of debt and default. A "default"

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**Application:** The NCLT found that the Financial Creditor successfully established the

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## Parties

- **Judges:** MAHENDRA KHANDELWA…; Yogendra Kumar…
- **Appellants:** State Bank of…
- **Respondents:** Surya Foundry…
- **Other parties:** Rakesh Kuma…; Nitin G…; +6 more
- **Advocates:** Abhishek…; Shubham S…; +9 more

## Timeline

- **2005-03-29 — Initial Cash Credit…**: Principal Borrower initially availed cash…
- **2007-05-08 — CC Limit San…**: CC Limit sanctioned for…

## 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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