# In the matter of PLBB Products Pvt. Ltd. Vs. Piyush Periwal & Ors. Company Appeal (AT) (Ins) No. 160 of 2021& I.A. No. 1117 of 2021

> NCLAT judgment dated 2021-09-07. Citation: TCN-2021-NCLAT-00107. The appeal was filed by PLBB Products Pvt. Ltd. (PLBB) under Section 61 of the Insolvency and…

- **Court:** NCLAT
- **Order date:** 7 Sept 2021
- **Citation:** TCN-2021-NCLAT-00107
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/plbb-products-pvt-ltd-vs-piyush-periwal-ors-company-appeal-a3ca607f

## Summary

### Background

The appeal was filed by PLBB Products Pvt. Ltd. (PLBB) under Section 61 of the Insolvency and Bankruptcy Code, 2016, against the order dated 10.02.2021 passed by the Adjudicating Authority (National Company Law Tribunal), Guwahati Bench. The Adjudicating Authority had allowed the Suspended Management of the Corporate Debtor (CD), an MSME Unit, to submit a Resolution Plan. The Adjudicating Authority also raised concerns about the Financial Creditor's claim being 43 times the disbursed loan amount after 21 years, despite RBI regulations and interest rate capping for MSMEs. The Adjudicating Authority also questioned the invocation of the guarantee by the original lenders (IBBI) and the subsequent claim by the Financial Creditor (SASF).

## Facts

PLBB Products Pvt. Ltd. (PLBB) filed an appeal against the order dated 10.02.2021 passed by the National Company Law Tribunal (NCLT), Guwahati Bench. The NCLT allowed the Suspended Management of the Corporate Debtor (CD), an MSME Unit, to submit a Resolution Plan. The original loan amount given to the principal borrower, National Boards Ltd. (NBL), was Rs.3.07 crores. The account became NPA on 1.05.2000. The Corporate Guarantee was invoked on 3.12.2001 for Rs.5,42,94,868.00. An OTS was worked out in 2005 for Rs.215.89 lacs, but only Rs.92.24 lacs was paid. The Financial Creditor (FC) filed a claim for Rs.133,54,94,330.00 on 1.12.2018 under Section 7 of IBC against the Corporate Guarantor. The Corporate Debtor is an MSME Unit established on 11.12.1973. The Corporate

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in allowing the Suspended Management of the …

**Ratio:** Section 240-A of the Code provides certain reliefs to the promoter of the MSME as a

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**Reasoning:** The Adjudicating Authority considered the arguments from both sides and the points

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**Interpretation:** The provision aims to promote entrepreneurship and provide opportunities for

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**Application:** The Adjudicating Authority's decision to allow the Suspended Management to

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## Parties

- **Judges:** Jarat Kuma…; Ashok Kumar…
- **Appellants:** PLBB Products…
- **Respondents:** National Plywood…; Piyush Pe…

## Timeline

- **2019-11-08 — Commencement…**: The Corporate Insolvency Resolution…
- **2020-06-27 — Publication o…**: Based on CoC decision, 'Form –G' was published on 27.06.2020 where the Respondent No.1…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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