State Bank of India Vs Navjeevan Tyres Private Limited (NCLT Mumbai)
The case of State Bank of India (SBI) versus Navjeevan Tyres Private Limited, heard by the National Company Law Tribunal (NCLT) Mumbai, revolves around an application by SBI under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Navjeevan Tyres Pvt. Ltd. (the Corporate Debtor). Here’s a detailed summary of the proceedings:
Background
SBI, acting as the Financial Creditor, filed the application on November 22, 2022, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Navjeevan Tyres Pvt. Ltd. The basis of this application stems from financial facilities extended by SBI to M/s. Deogiri Infrastructure Private Limited, with whom Navjeevan Tyres Pvt. Ltd. had provided a corporate guarantee.
Financial Arrangements and Defaults
From 2007 onwards, SBI provided various credit facilities to Deogiri Infrastructure Pvt. Ltd., totaling significant amounts. Navjeevan Tyres Pvt. Ltd. had furnished a corporate guarantee to SBI for these facilities. However, due to non-repayment by Deogiri Infrastructure Pvt. Ltd., the accounts were declared Non-Performing Assets (NPAs) by SBI in October 2018. Subsequently, a notice under Section 13(2) of the SARFAESI Act, 2002 was issued to Deogiri Infrastructure Pvt. Ltd. in April 2019, demanding repayment within 60 days. Despite this, the debts remained unpaid, leading SBI to file for CIRP against both the Principal Borrower and the Corporate Guarantor (Navjeevan Tyres Pvt. Ltd.).
