# In the matter of Pawan Kumar vs. Central Bank of India & Ors.

> NCLAT judgment dated 2025-01-15. Citation: TCN-2025-NCLAT-00265. This case involves an appeal against the order dated 14.05.2024 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 15 Jan 2025
- **Citation:** TCN-2025-NCLAT-00265
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/pawan-kumar-vs-central-bank-of-india-ors-66ad09f9

## Summary

### Background

This case involves an appeal against the order dated 14.05.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Chandigarh Bench, Court-I, admitting Section 7 Application filed by Punjab National Bank (Successor of Oriental Bank of Commerce), initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s Kaur Sain Spinners Ltd. The Central Bank of India had also filed a Section 7 application, which was later dismissed as infructuous. The Corporate Debtor had taken loans from a consortium of banks, including Oriental Bank of Commerce and Central Bank of India. The account was declared NPA by both banks in 2017. Recovery proceedings were initiated by Central Bank of India before the Debts Recovery Tribunal (DRT). The

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## Facts

The Corporate Debtor, M/s Kaur Sain Spinners Ltd., received a loan from a consortium of banks, including Oriental Bank of Commerce and Central Bank of India, under an agreement dated 2017-03-06. The Central Bank of India declared the account as NPA on 2017-09-30, and Oriental Bank of Commerce followed suit on 2017-08-31. Central Bank of India initiated recovery proceedings before the Debts Recovery Tribunal (DRT) by filing OA No.3000 of 2018, and Oriental Bank of Commerce filed OA No.3249 of 2019. Central Bank of India filed a Section 7 application on 2018-09-19, seeking initiation of CIRP, and Oriental Bank of Commerce also filed a Section 7 application. The DRT passed a decree in favor of Central Bank of India for Rs.49,44,65,248/-. Recovery proceedings were

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in admitting the Section 7 application filed by Punjab …

**Ratio:** The Adjudicating Authority is empowered to admit a Section 7 application if it finds that

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**Reasoning:** The Adjudicating Authority found the existence of debt and default on the part of the

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**Interpretation:** The existence of debt and default are the primary conditions for admitting a

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**Application:** The Adjudicating Authority's finding of debt and default justified the

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** Pawan K…
- **Respondents:** M/s Kaur Sain…; Central Bank of…

## Timeline

- **2017-03-06 — Loan Agre…**: A loan was extended to the Corporate Debtor by a consortium of banks, including Oriental…
- **2017-08-31 — Account Decla…**: Oriental Bank of Commerce declared the…

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