# In the matter of Vivekanand Jha Vs. Punjab National Bank and Anr. CA (AT) (Ins) No. 407 of 2021

> NCLAT judgment dated 2021-06-14. Citation: TCN-2021-NCLAT-00233. The appeal was filed by the Appellant, who was under suspended management of the Corporate…

- **Court:** NCLAT
- **Order date:** 14 Jun 2021
- **Citation:** TCN-2021-NCLAT-00233
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/vivekanand-jha-vs-punjab-national-bank-and-anr-ca-1bf0c380

## Summary

### Background

The appeal was filed by the Appellant, who was under suspended management of the Corporate Debtor, Mithilanchal Industries Pvt. Ltd., against the order dated 20.04.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench) in C.P. (IB) No. 179/7/NCLT/AHM/2019. The Adjudicating Authority admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) filed by the Respondent, Punjab National Bank, against the Corporate Debtor, Telstar Industries Pvt. Ltd. The bank claimed that it had approved various financial facilities and disbursed loans in the form of cash/credit and overdraft facilities dated 3rd November 2010, but the Corporate Debtor did not pay the installments as per the agreement. The bank had to resort

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## Facts

Punjab National Bank (PNB) claimed that Telstar Industries Pvt. Ltd. defaulted on loan repayments after availing financial facilities. PNB initiated proceedings before the Debts Recovery Tribunal (DRT) and issued a notice under Section 13(2) of the SARFAESI Act, 2002, after the loan account became a Non-Performing Asset (NPA). PNB claimed the date of default was December 27, 2014. The Corporate Debtor, Telstar Industries Pvt. Ltd., submitted One Time Settlement (OTS) proposals to the bank, which the bank claimed acknowledged the debt. The Adjudicating Authority admitted the application under Section 7 of IBC filed by PNB. The appellant argued that the application was time-barred because the date of default was incorrectly stated and that the OTS extended the limitation

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## Issues and analysis

### Issue 1: Whether the application under Section 7 …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate corporate insolvency

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**Reasoning:** The Adjudicating Authority considered the submissions of both parties and found that the

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**Interpretation:** The interpretation of Section 7 of the IBC and the Limitation Act is that an

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**Application:** In this case, the Corporate Debtor acknowledged the debt through OTS proposals

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## Parties

- **Judges:** A.I.S. C…; Alok Sriv…
- **Appellants:** Vivekanan…
- **Respondents:** Telstar Industries…; Punjab National…
- **Advocates:** Adhitya Sri…; Rahul P…; +1 more

## Timeline

- **2010-11-03 — Loan Disbur…**: Punjab National Bank approved and disbursed financial facilities to Telstar Industries…
- **2014-12-27 — Date of D…**: Punjab National Bank claimed that 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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