S.No.5

IN THE NATIONAL COMPANY LAW TRIBUNAL

HYDERABAD BENCH – 1

VC AND PHYSCIAL (HYBRID) MODE

ATTENDANCE CUM ORDER SHEET OF THE HEARING HELD ON

19-04-2024 AT 10:30 AM

CP(IB) No. 273/7/HDB/2023

u/s. 7 of IBC, 2016

IN THE MATTER OF:

M/s. Frontline Enterprises Limited …Financial Creditor

AND

Sri Nagakrishna Chemicals Limited …Corporate Debtor

C O R A M:-

DR. VENKATA RAMAKRISHNA BADARINATH NANDULA, HON’BLE MEMBER (JUDICIAL)

SH. CHARAN SINGH, HON’BLE MEMBER (TECHNICAL)

O R D E R

Orders pronounced. In the result company petition is rejected. No costs.

Sd/- Sd/-

MEMBER (T) MEMBER (J)

Swapna

NATIONAL COMPANY LAW TRIBUNAL HYDERABAD BENCH-1 CP(IB) No. 273/7/HDB/2023 Petition u/s 7 of IBC, 2016, r/w Rule 4 of I&B (AAA) Rules, 2016 IN THE MATTER OF M/S SRI NAGAKRISHNA CHEMICALS LTD Filed by M/s Frontline Enterprises Limited

6-2-913/914, 2^nd Floor, Progressive Towers Khairtabad, Hyderabad – 500004 …Petitioner VERSUS M/s Sri Nagakrishna Chemicals Limited

8-2-1/4, Punjagutta, Opp: SBI Yellareddyguda Branch Hyderabad …Respondent Date of order: 19.04.2024 Coram:

Dr. N. Venkata Ramakrishna Badarinath, Hon’ble Member Judicial Shri Charan Singh, Hon’ble Member Technical Appearance:

For Petitioner: Ms. J.V.L. Bharati, Advocate For Respondent: Mr. Chakilam Nagarjun Rao, Advocate PER: BENCH ORDER

1. This Petition is filed by Frontline Enterprises Limited (hereinafter referred to as “Petitioner”) under Section 7(2) of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as “the Code”) read with Rule 34 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiation of Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) against M/s. Sri Nagakrishna Chemicals Limited, (hereinafter referred to as “Corporate Debtor”), alleging non-payment of Rs. 10,19,00,000 (Rupees Ten Crores Nineteen Lakhs Only), plus interest of Rs. 1,25,160.00 is said to be due and payable by Corporate Debtor to the Petitioner as on 31.07.2023.

2. The gist of the averments in the Company Petition is that the Petitioner i.e. M/s Frontline Enterprises Limited had granted loan to the tune of Rs. 10,19,00,000/- from time to time at the request of the Corporate Debtor i.e. M/s Sri Nagakrishna Chemicals Limited under a loan agreement dated 19.08.2019, in order to facilitate the Corporate Debtor to close the loan accounts availed by it from the Banks and Financial Institutions under an OTS, which the Respondent is said to have been extended.

3. According to the Petitioner, the Corporate Debtor has failed in complying the terms and conditions of the Loan Agreement. Hence notice dated 01.08.2023 was sent to the Respondent demanding payment of Rs.

11,44,16,000/- including interest for which reply has been received from the Respondent stating that they could not finalise the OTS with MPSFC despite best efforts and sought six months’ time.

4. The Corporate Debtor had entered appearance through its Counsel on

12.03.2024 and filed the following memo, which is signed by the Counsel for the Corporate Debtor alone.

That the Respondent/Corporate Debtor has availed three loans on consortium basis from SBI, UI and M/s Madhya Pradesh State Financial Corporation and settled the loan accounts under OTS with two financial institutions i.e. from SBI and UBI except M/s Madhya Pradesh State Financial Corporation. The OTS proposal submitted by the CD with M/s Madhya Pradesh State Financial Corporation is pending for want of approval of their Board.

Anticipating the closure of three loan agreements under OTS with the financial institutions, the Respondent has entered into an Agreement dated 19.08.2019 with the Petitioner/Applicant to transfer of company assets as the petitioner has agreed to pay the OTS amounts to the bank. The OTS is pending with M/s Madhya Pradesh State Financial Corporation, the respondent could not hand over the company to the petitioner as per the agreement.

5. In the light of the above, the point that emerges for consideration is:

Whether a financial