# In the matter of Chand Prakash Mehra Vs. Praveen Bansal & Anr. Company Appeal (AT) (Ins) No.1378 of 2019

> NCLAT judgment dated 2021-09-20. Citation: TCN-2021-NCLAT-00091. The case involves an appeal against the admission of an application under Section 7 of the…

- **Court:** NCLAT
- **Order date:** 20 Sept 2021
- **Citation:** TCN-2021-NCLAT-00091
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/chand-prakash-mehra-vs-praveen-bansal-anr-company-appeal-a60ccabf

## Summary

### Background

The case involves an appeal against the admission of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the Corporate Debtor, M/s. Silverton Spinners Ltd. The State Bank of India (SBI), Respondent No. 2, filed CP(IB) No. 522/KB/2018 before the Adjudicating Authority (National Company Law Tribunal, Kolkata Bench, Kolkata), claiming that the Corporate Debtor was granted credit facilities initially by Canara Bank in 1995, and subsequently SBI and Central Bank of India became part of the lenders. The Corporate Debtor allegedly defaulted on the debt, which was classified as NPA. The Adjudicating Authority admitted the application under Section 7 of IBC, leading to the present appeal by the Appellant, the Erstwhile Director of the

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## Facts

The Corporate Debtor, M/s. Silverton Spinners Ltd., availed credit facilities from Canara Bank in 1995. Subsequently, State Bank of India (SBI) and Central Bank of India became part of the lending consortium. The Corporate Debtor executed a common loan agreement and other documents in 1998. In 2010, there was a revival structuring effort, and a new sanction letter was issued on March 18, 2013. The Corporate Debtor's name was changed from M/s. Pacific Cotspin Limited to M/s. Silverton Spinners Limited. The Corporate Debtor failed to comply with the CDR package, and the account was termed NPA on August 25, 2015, with the NPA date revised to January 15, 2013, based on the formalization of the CDR package. SBI filed an application under Section 7 of the IBC on March 5,

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) filed by …

**Ratio:** Section 18 of the Limitation Act, 1963 states that if, before the expiration of the

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**Reasoning:** The NCLAT reasoned that the Corporate Debtor had acknowledged the debt in letters dated

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**Interpretation:** Section 18 of the Limitation Act is interpreted to mean that any written

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**Application:** The NCLAT applied the ratio to the facts by noting that the Corporate Debtor's

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## Parties

- **Judges:** A.I.S. C…; KanthiNar…
- **Appellants:** Chand Prakash…
- **Respondents:** M/s. Silverton…; Praveen B…

## Timeline

- **1995-01-01 — Credit Facility by…**: Canara Bank initially granted credit…
- **1998-09-25 — Common Loan A…**: Corporate Debtor executed common loan Agreement dated 25.09.1998 along with joint deed of…

## 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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