# In the matter of Saurabh Jhunjhunwala vs. Pegasus Assets Reconstruction Company Private Limited & Anr.

> NCLAT judgment dated 2025-05-01. Citation: TCN-2025-NCLAT-00067. This case involves an appeal against the admission of a Section 7 application under the…

- **Court:** NCLAT
- **Order date:** 1 May 2025
- **Citation:** TCN-2025-NCLAT-00067
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/saurabh-jhunjhunwala-vs-pegasus-assets-reconstruction-company-private-limited-an-6bf00cb5

## Summary

### Background

This case involves an appeal against the admission of a Section 7 application under the Insolvency and Bankruptcy Code (IBC) by the Adjudicating Authority (National Company Law Tribunal, Kolkata). The appellant, the suspended director of the corporate debtor, Fairdeal Supplies Limited, challenged the order. The financial creditor, Pegasus Asset Reconstruction Company Private Ltd., filed the Section 7 application. The corporate debtor had obtained financial facilities from Allahabad Bank in 2010, which later declared the account NPA in 2011. Allahabad Bank assigned its debt to Pegasus in 2013. The corporate debtor challenged the assignment agreement and also argued that the Section 7 application was barred by limitation.

## Facts

Fairdeal Supplies Limited (corporate debtor) obtained financial facilities from Allahabad Bank in 2010 for ₹34.50 crore to purchase property in Coimbatore. A sanction letter was issued on 2010-03-05. The loan repayment schedule was restructured on 2011-03-30. The account was declared NPA on 2011-09-30. Allahabad Bank assigned its debt to Pegasus Asset Reconstruction Company Private Ltd. on 2013-09-27. As per the assignment agreement, the total amount due was ₹30,31,00,02,000 as on 2013-07-15. In 2012, Allahabad Bank filed an application under Section 19 of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993. In 2017, the corporate debtor filed a suit challenging the assignment agreement. On 2022-08-18, Pegasus filed a Section 7 application claiming a

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## Issues and analysis

### Issue 1: Whether assignment agreement dated 2013-09-27, executed by Allahabad Bank in favour of Pegasus is …

**Ratio:** The principle of severability applies to the assignment agreement. Even if a portion of

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**Reasoning:** The Tribunal relied on the Supreme Court's judgment in 'Mattapalli Chelamayya’Vs.

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**Interpretation:** Section 28 of the Registration Act, as amended in Tamil Nadu, mandates that

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**Application:** The assignment agreement is held void only insofar as it creates an equitable

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Saurabh Jhunjhunwa…
- **Respondents:** Fairdeal Supplies…; Pegasus Assets…

## Timeline

- **2010-01-01 — Financial Facilities…**: Fairdeal Supplies Limited obtained financial facilities from Allahabad Bank for ₹34.50…
- **2010-03-05 — Sanction Lette…**: Allahabad Bank issued a…

## 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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