# In the matter of ABXL Retails (I) Pvt. Ltd. CP (IB) No. 114-7-NCLT-AHM-2017

> NCLT judgment dated 2017-09-19. Citation: TCN-2017-NCLT-00393. Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 19 Sept 2017
- **Citation:** TCN-2017-NCLT-00393
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/abxl-retails-i-pvt-ltd-cp-ib-no-114-7-nclt-ahm-2017-8b750deb

## Summary

### Background

Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against ABXL Retails (I) Private Ltd., categorizing it as the 'Corporate Debtor'. The bank sought to recover outstanding dues. The Respondent Company had applied for a Cash Credit Limit of Rs. 7,00,00,000 to the Applicant Bank, which was sanctioned on 9.7.2010. The Respondent Company executed a Master Undertaking on 21.7.2010. The Respondent also hypothecated goods worth Rs. 10,00,00,000. The Respondent Company failed to repay an outstanding amount of Rs. 10,82,58,373.74, including interest till 20th August, 2017. The Applicant issued a notice under Section 13(2) of the SARFAESI Act demanding the outstanding

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## Facts

Punjab National Bank (PNB) extended a cash credit facility of Rs. 7,00,00,000 to ABXL Retails India Pvt. Ltd. (ABXL) on 9.7.2010. ABXL executed a Master Undertaking on 21.7.2010 and hypothecated goods worth Rs. 10,00,00,000 as security. ABXL defaulted on repayments, leading to an outstanding amount of Rs. 10,82,58,373.74 as of 20th August, 2017. PNB issued a notice under Section 13(2) of the SARFAESI Act and took measures under Section 13(4). The District Magistrate ordered possession of the property on 26.9.2011. PNB auctioned the mortgaged property on 21.2.2012, 22.2.2012, and 29.6.2012, realizing Rs. 5,16,52,111. PNB filed O.A. No. 151 of 2012 with the Debt Recovery Tribunal (DRT) for the remaining claim of Rs. 6,53,38,550.37. The DRT, Ahmedabad, decreed the claim

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## Issues and analysis

### Issue 1: Whether the application filed by Punjab National Bank under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Adjudicating Authority found that the application was complete in all respects and

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the CIRP

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**Application:** The Adjudicating Authority applied Section 7 to the facts presented by Punjab

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** Punjab National…
- **Respondents:** ABXL Retails (I)…; ABXL Retails…

## Timeline

- **2010-07-09 — Cash Credit Limit…**: Punjab National Bank sanctioned a Cash Credit Limit of Rs. 7,00,00,000 to ABXL Retails…
- **2010-07-21 — Master Undertaking…**: ABXL Retails India Pvt. Ltd.…

## 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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