# In the matter of Babasaheb Sawalaram Vs. Punjab National Bank and Anr. CA(AT)(Ins)No. 839 of 2019

> NCLAT judgment dated 2020-06-02. Citation: TCN-2020-NCLAT-00248. The case involves an appeal against the admission of an application under Section 7 of the…

- **Court:** NCLAT
- **Order date:** 2 Jun 2020
- **Citation:** TCN-2020-NCLAT-00248
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/babasaheb-sawalaram-vs-punjab-national-bank-and-anr-ca-dcaf6ab2

## Summary

### Background

The case involves an appeal against the admission of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by the National Company Law Tribunal (NCLT), Mumbai Bench, against Harneshwar Agro Products Power and Yeast (I) Ltd (Corporate Debtor). The appellant, a suspended director of the Corporate Debtor, challenged the NCLT's order, arguing that the debt was time-barred and that the NCLT wrongly relied on a mortgage document. The respondent, Punjab National Bank, claimed that the dues were outstanding and relied on One Time Settlement (OTS) offers and payments to support their claim that the dues were within the limitation period.

## Facts

Punjab National Bank (PNB) extended term loans and working capital facilities to Harneshwar Agro Products Power and Yeast (I) Ltd (Corporate Debtor) starting in 2005. These facilities were renewed and revised over time. As of January 6, 2019, the outstanding dues amounted to Rs. 45,82,14,984. PNB presented 17 documents to the NCLT. A SARFAESI Act notice was issued on November 12, 2011, for Rs. 12,82,06,949. The Corporate Debtor claimed the bank was vindictive and that other banks in the consortium were not made party to the proceedings. The Corporate Debtor also stated that the Bank had filed an Original Application before DRT which had abated. The NCLT rejected the limitation argument based on a Simple Mortgage Deed dated March 28, 2008, finding the debt to be due and

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## Issues and analysis

### Issue 1: Whether the NCLT was correct in admitting the application under Section 7 of the Insolvency and …

**Ratio:** The Adjudicating Authority (NCLT) rightly admitted the application as the dues still

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**Reasoning:** The Appellant all the time admitted and acknowledged the dues and making some payments

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**Interpretation:** The NCLT's decision to admit the application under Section 7 of the IBC was

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**Application:** The appellant had consistently acknowledged the debt and made payments, which

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## Parties

- **Judges:** A.I.S. C…; A.B. S…; +1 more
- **Appellants:** Babasaheb…
- **Respondents:** Harneshwar Agro…; Punjab National…

## Timeline

- **2005-01-01 — Loan Sanc…**: Term loan was sanctioned…
- **2011-03-31 — Account Decla…**: The account of the Corporate Debtor was…

## 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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