# In the matter of Virigineni Anjaiah vs. Pridhvi Asset Reconstruction
and Securitization Company Ltd. & Ors.

> NCLAT judgment dated 2024-05-02. Citation: TCN-2024-NCLAT-00463. This case involves an appeal against an order passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 2 May 2024
- **Citation:** TCN-2024-NCLAT-00463
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/virigineni-anjaiah-vs-pridhvi-asset-reconstruction-and-securitization-company-lt-38b220c0

## Summary

### Background

This case involves an appeal against an order passed by the National Company Law Tribunal (NCLT), Hyderabad, which admitted the Corporate Debtor (M/s. Sri Pavana Keerthi Hotels India Private Limited) into Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The appeal was filed by the Suspended Director of the Corporate Debtor, Mr. Virigineni Anjaiah. The Financial Creditor, M/s. Pridhvi Asset Reconstruction and Securitization Company Limited (PARAS), initiated the CIRP based on an assigned debt from Andhra Bank. The Corporate Debtor's account was classified as NPA, and the original Financial Creditor (Andhra Bank) had obtained a decree from the Debt Recovery Tribunal (DRT) before assigning the debt to PARAS.

## Facts

M/s. Sri Pavana Keerthi Hotels India Private Limited (Corporate Debtor) obtained a term loan of Rs. 19.28 crore from Andhra Bank, repayable in 94 installments from June 2015 to March 2023. The loan was secured by personal guarantees and collateral securities. The Corporate Debtor defaulted on repayments, leading to the loan being classified as NPA on 31.10.2015. Andhra Bank filed OA No. 403/2017 before DRT, Hyderabad-I, seeking recovery of Rs. 32,19,88,213.00. On 27.09.2017, Andhra Bank assigned the debt to M/s. Pridhvi Asset Reconstruction and Securitization Company Limited (PARAS). DRT, Hyderabad-I, allowed the bank's application on 19.02.2019 for recovery of Rs. 25,71,79,268.00 plus interest. A Debt Recovery Certificate was issued on 09.07.2019. PARAS, as the

…

## Issues and analysis

### Issue 1: Whether the NCLT has erred in holding that the liability arising out of the decree obtained in …

**Ratio:** A liability in respect of a claim arising out of a Recovery Certificate would be a

…

**Reasoning:** The NCLAT relied on the Supreme Court's judgment in Kotak Mahindra Bank Limited Vs A.

…

**Interpretation:** The Supreme Court in Kotak Mahindra Bank Limited (Supra) has interpreted

…

**Application:** The Recovery Certificate issued on 09.07.2019 created a financial debt.

…

## Parties

- **Judges:** M. Venu…; Jatindranat…
- **Appellants:** Virigineni…
- **Respondents:** Pavana Keerthi…; Pridhvi Assets…

## Timeline

- **2015-10-31 — Loan Classifie…**: The Corporate Debtor's loan account was…
- **2017-09-27 — Debt Assi…**: Andhra Bank assigned the debt portfolio of the Corporate Debtor to M/s. Pridhvi Asset…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclat-new-delhi/virigineni-anjaiah-vs-pridhvi-asset-reconstruction-and-securitization-company-lt-38b220c0