# in the matter of Bhushan Power and Steel Ltd. CA No. (IB)-202-(PB)-2017

> NCLT judgment dated 2017-07-26. Citation: TCN-2017-NCLT-00699. Punjab National Bank (PNB), the Financial Creditor, filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 26 Jul 2017
- **Citation:** TCN-2017-NCLT-00699
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bhushan-power-and-steel-ltd-ca-no-ib-202-pb-2017-76f4bb72

## Summary

### Background

Punjab National Bank (PNB), the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the insolvency resolution process against Bhushan Power and Steel Limited, the Corporate Debtor. PNB, a body corporate constituted under the Banking Companies Act, claimed a default on financial debt, working capital facilities, term loans, and external commercial borrowings. The Corporate Debtor's authorized share capital was Rs. 450,00,00,000/-, and the paid-up share capital was Rs. 249,70,11,300/-. The application included details of the financial debt, working capital facilities, term loan, and external commercial borrowings facilities.

## Facts

Punjab National Bank (PNB) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Bhushan Power and Steel Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). PNB claimed that Bhushan Power and Steel Limited had defaulted on financial debt, working capital facilities, term loans, and external commercial borrowings. The total outstanding amount was substantial. The initial date of default for fund-based working capital facilities was 01.02.2016, and for term loans, it was 01.03.2016 and 01.11.2016. The defaulted amount for working capital facilities was Rs.541,43,00,000 as of 31.05.2017. The defaulted amount under Term Loan Agreement I as on 31.05.2017 was Rs.17,04,00,000/- and under Term Loan Agreement II

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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 NCLT examined the application and supporting documents submitted by Punjab National

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

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**Application:** The NCLT found that the application was complete in all respects, as the

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## Parties

- **Judges:** M. M. K…; Deepa Kr…; +1 more
- **Appellants:** Punjab National…
- **Respondents:** Bhushan Power &…

## Timeline

- **1999-02-22 — Incorporation of…**: Bhushan Power and Steel…
- **2016-02-01 — Initial Date o…**: Initial date of default for fund…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(11) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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