# In the matter of Farooq Ali Khan vs. Punjab National Bank & Ors.

> HC judgment dated 2023-11-21. Citation: TCN-2023-HC-00013. The case involves a writ petition filed by Mr. Farooq Ali Khan, promoter and suspended director of…

- **Court:** HC
- **Order date:** 21 Nov 2023
- **Citation:** TCN-2023-HC-00013
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/farooq-ali-khan-vs-punjab-national-bank-ors-7161368c

## Summary

### Background

The case involves a writ petition filed by Mr. Farooq Ali Khan, promoter and suspended director of Associate Decor Limited, challenging the Corporate Insolvency Resolution Process (CIRP) initiated against the company. Associate Decor Limited was established between 2007 and 2011 and engaged in the manufacture of wood products. Between 2010 and 2015, the company requested Punjab National Bank for a term loan and credit facilities. A consortium of banks granted approximately 582 crores. In 2016, disputes arose among the promoters due to market changes, leading to irregular loan repayments and the account being categorized as a Non-Performing Asset (NPA). Punjab National Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, before the NCLT

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## Facts

Associate Décor Limited, established between 2007 and 2011, manufactured wood products. From 2010 to 2015, the company sought loans from Punjab National Bank, leading to a consortium of banks granting approximately 582 crores. In 2016, disputes arose among promoters due to market changes, causing irregular loan repayments and NPA classification. Punjab National Bank initiated CIRP under Section 7 of IBC. During NCLT proceedings, the company's turnover improved. The company filed for adjournment, claiming assets would exceed liabilities. NCLT appointed an Interim Resolution Professional, removing the petitioner as director. A Committee of Creditors (CoC) was formed. The first CoC meeting was on 2018-12-26. The CoC appointed a Resolution Professional. Two resolution

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## Issues and analysis

### Issue 1: Whether the notice issued for the 19th Committee of Creditors meeting on 11-02-2020, providing only …

**Ratio:** Section 24(3) of the Insolvency and Bankruptcy Code (IBC) and Regulation 19 of the

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**Reasoning:** The court reasoned that while the notice period could be reduced, it required a written

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**Interpretation:** Section 24(3) and Regulation 19 establish a mandatory requirement for providing

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**Application:** In this case, the Resolution Professional issued notice on 11-02-2020 at 12:31

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## Parties

- **Judges:** M. NAGAPR…
- **Appellants:** FAROOQ AL…
- **Respondents:** Associate Décor…; Punjab National…
- **Other parties:** Kohi…

## Timeline

- **2007-01-01 — Establishment of…**: Associate Décor Limited was established between 2007 and 2011 to manufacture wood…
- **2010-01-01 — Loan Req…**: Between 2010 and 2015, the company requested Punjab National Bank for a term loan and…

## 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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