# In the matter of Pegasus Assets Reconstructution Private Limited Vs. Yashomati Hospitals Private Limited CA(AT)(Ins)No. 1337 of 2019

> NCLAT judgment dated 2020-11-24. Citation: TCN-2020-NCLAT-00038. This case involves an appeal against an order passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 24 Nov 2020
- **Citation:** TCN-2020-NCLAT-00038
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/pegasus-assets-reconstructution-private-limited-vs-yashomati-hospitals-private-l-69bb7d76

## Summary

### Background

This case involves an appeal against an order passed by the National Company Law Tribunal (NCLT), Bengaluru Bench, which dismissed a company petition filed under Section 7 of the Insolvency and Bankruptcy Code (IBC) by Pegasus Assets Reconstruction Private Limited (Pegasus ARC), the appellant. The NCLT had allowed an application filed by Yashomati Hospitals Private Limited, the corporate debtor, seeking dismissal of the company petition. The appellant, an assignee of South Indian Bank (SIB), had filed the petition based on a debt assigned to it by SIB. The NCLT dismissed the petition, reserving liberty to the appellant to file a fresh company petition after the High Court of Karnataka decides pending issues. The appeal before the NCLAT challenges this dismissal.

## Facts

Pegasus Assets Reconstruction Private Limited (Pegasus ARC), as assignee of South Indian Bank (SIB), filed a Section 7 application under the Insolvency and Bankruptcy Code (IBC) against Yashomati Hospitals Private Limited (Corporate Debtor) before the NCLT, Bengaluru. The application was based on a debt assigned to Pegasus ARC by SIB. The Corporate Debtor had earlier borrowed loans under a consortium arrangement with State Bank of India (SBI) and SIB. SBI initiated SARFAESI actions, which led to the Corporate Debtor filing writ petitions in the High Court of Karnataka. The Corporate Debtor also filed an application (I.A. 69 of 2019) before the NCLT seeking dismissal of the Section 7 application, arguing that the DRT proceeding was pending and High Court had stayed the

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## Issues and analysis

### Issue 1: Whether the NCLT was justified in dismissing the …

**Ratio:** The Adjudicating Authority must consider the documents and facts presented to determine

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**Reasoning:** The NCLAT found that the NCLT did not properly consider the documents and facts presented

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to initiate

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**Application:** In this case, the NCLAT held that the NCLT erred in dismissing the Section 7

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## Parties

- **Judges:** A.I.S. C…; Anant Bijay…; +2 more
- **Appellants:** Pegasus Assets…
- **Respondents:** Yashomati…

## Timeline

- **2017-11-23 — Filing of Section 7…**: Appellant/SIB filed IBC Section 7 Application before Adjudicating Authority at Bengaluru…
- **2019-01-30 — CD files IA…**: CD filed IA 69/2019 under Rule 11 read with Rule 51 of NCLT Rules, 2016 challenging…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 19 — Personnel to extend co-operation to interim…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-19)

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