# Surender Pal Singh Mangat & Gursimran Kaur Mann vs. Oriental Bank of Commerce (Now Punjab National Bank) & Ors.

> NCLAT judgment dated 2026-07-13. Citation: TCN-2026-NCLAT-00232. Simbhaoli Sugar Limited (Corporate Debtor) defaulted on loans from Oriental Bank of Commerce…

- **Court:** NCLAT
- **Order date:** 13 Jul 2026
- **Citation:** TCN-2026-NCLAT-00232
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/surender-pal-singh-mangat-gursimran-kaur-mann-vs-oriental-bank-of-commerce-49kgp

## Summary

### Background

Simbhaoli Sugar Limited (Corporate Debtor) defaulted on loans from Oriental Bank of Commerce (now Punjab National Bank), leading to the bank filing a Section 7 petition under the IBC, 2016. The NCLT, Allahabad Bench, admitted the Corporate Debtor into Corporate Insolvency Resolution Process (CIRP) via an order dated 11.07.2024. Two appeals were filed against this order: Company Appeal (AT) (Insolvency) No. 1404 of 2024 by Surender Pal Singh Mangat (a sugar cane farmer) and Company Appeal (AT) (Insolvency) No. 1405 of 2024 by Gursimran Kaur Mann (suspended director of the Corporate Debtor). State Bank of India (SBI), as the lead bank in the Joint Lender's Forum (JLF), also sought impleadment.

## Facts

Simbhaoli Sugar Limited was established in 1933.

The company became unable to pay its debt.

Oriental Bank of Commerce (now Punjab National Bank) filed an application under Section 7 of the IBC, 2016, on 05.09.2018.

As per Form-1, the total outstanding as on 31.07.2018 was Rs. 103.61 crores plus further interest due to Oriental Bank of Commerce.

A total credit facility of Rs. 110 crores was extended by Oriental Bank of Commerce to the Corporate Debtor vide letter dated 29.01.2016.

The Corporate Debtor subsequently defaulted on payment of the principal amount and interest.

Oriental Bank of Commerce classified the account of the Corporate Debtor as NPA on 30.11.2016.

A legal notice dated 29.10.2017 and a recall notice dated 01.11.2017 were issued by Oriental Bank of Commerce.

…

## Issues and analysis

### Issue 1: Whether the Section 7 IBC proceedings initiated against the Corporate Debtor are non-est due to the …

**Ratio:** The NCLAT held that the Section 7 petition filed by Oriental Bank of Commerce was

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**Reasoning:** The Financial Creditor (OBC) initiated legal actions, including loan recall and legal

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**Interpretation:** The *Dharani Sugars* judgment applies only to cases where Section 7 proceedings

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**Application:** Since OBC's actions and the Section 7 petition were independent of and predated

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## Parties

- **Judges:** Yogesh K…; Ajai Das Me…
- **Appellants:** Surender Pal…; Gursimran Kaur…; +2 more
- **Respondents:** Simbhaoli Sugar…; Oriental Bank of…; +4 more
- **Other parties:** other b…; Anurag…; +1 more
- **Advocates:** Akash…; Abhipsa…; +18 more

## Timeline

- **2016-01-29 — Credit Facility…**: A total credit facility of Rs. 110 crores was extended by Oriental Bank of Commerce to…
- **2016-11-30 — Account Classified as…**: The lender bank (Oriental Bank of Commerce) classified the account of the Corporate…

## 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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