# In the matter of Punjab National bank Vs.Mr. Ashish Chhawchharia and Ors. Company Appeal (AT) (Insolvency) No. 584 of 2021
& IA No.2720 of 2021

> NCLAT judgment dated 2022-10-21. Citation: TCN-2022-NCLAT-00135. This case involves an appeal filed by Punjab National Bank (PNB), a financial creditor,…

- **Court:** NCLAT
- **Order date:** 21 Oct 2022
- **Citation:** TCN-2022-NCLAT-00135
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/punjab-national-bank-vsmr-ashish-chhawchharia-and-ors-company-appeal-at-insolven-aad041d7

## Summary

### Background

This case involves an appeal filed by Punjab National Bank (PNB), a financial creditor, against an order dated 22.06.2021 passed by the National Company Law Tribunal (NCLT), Mumbai Bench, which approved a resolution plan for Jet Airways (India) Limited. PNB's appeal contests the reduction of its admitted claim by the Resolution Professional (RP) due to the invocation of pledged shares. The RP's decision was based on a prior judgment of the National Company Law Appellate Tribunal (NCLAT) in India Power Corporation Ltd. vs. Meenakshi Energy Ltd., which was subsequently overturned by the Supreme Court in PTC India Financial Services Ltd. vs. Mr. Venkateshwarlu Kari. PNB argues that the RP's reduction of its claim was unjustified and caused prejudice, affecting its

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## Facts

In 2016-17, Punjab National Bank (PNB) extended loans to Jet Airways (India) Limited, the Corporate Debtor. Jet Airways defaulted on repayment. On March 30, 2019, the Corporate Debtor's promoter executed a Share Pledge Agreement in favor of PNB to secure outstanding dues, pledging 2,95,46,679 equity shares. On June 20, 2019, the Corporate Insolvency Resolution Process (CIRP) commenced under Section 7 of the Insolvency and Bankruptcy Code (IBC) based on an application by State Bank of India. PNB filed a claim of Rs.963.47 crores, later revised to Rs.956.11 crores and then Rs.956.21 crores. The Resolution Professional (RP) admitted Rs.9,562,165,500/-. The RP issued an email on September 19, 2020, stating the claim would be reduced by the fair market value of pledged

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) was justified in reducing the admitted claim of Punjab …

**Ratio:** The declaration of law by the Hon'ble Supreme Court has to be treated as law of the land

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**Reasoning:** The NCLAT reasoned that the RP's reduction of PNB's claim was based on the judgment in

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**Interpretation:** This issue involves the interpretation of the effect of a subsequent judicial

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**Application:** The NCLAT applied the Supreme Court's judgment to the specific facts of the

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Punjab National…
- **Respondents:** Jet Airways…; Ashish Chhawchhari…
- **Advocates:** R. Venkat…; Piyush Be…; +10 more

## Timeline

- **2016-01-01 — Loan Exte…**: Punjab National Bank extended various…
- **2019-03-30 — Share Pledge A…**: The Promoter of the Corporate Debtor executed a Share Pledge Agreement in favor of the…

## 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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