# In the matter of DLS Industries Ltd. CP. No. 723-I&BP-NCLT-Mah-2017

> NCLT judgment dated 2017-05-03. Citation: TCN-2017-NCLT-00865. This case involves an insolvency and bankruptcy petition filed by Punjab National Bank (PNB), a…

- **Court:** NCLT
- **Order date:** 3 May 2017
- **Citation:** TCN-2017-NCLT-00865
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dls-industries-ltd-cp-no-723-ibp-nclt-mah-2017-0658dc4f

## Summary

### Background

This case involves an insolvency and bankruptcy petition filed by Punjab National Bank (PNB), a financial creditor, against DLS Industries Limited, the corporate debtor, for initiation of the insolvency resolution process. The petition is based on the corporate debtor's default in making payments for credit facilities sanctioned by PNB. The bank had sanctioned term loans and working capital loans to the corporate debtor, which were secured by hypothecation of stock and book debts, as well as collateral security of immovable properties belonging to guarantors. The corporate debtor defaulted on payments, leading to the classification of the loan accounts as non-performing assets. PNB issued notices under SARFAESI Act and filed a recovery suit, which is pending.

…

## Facts

Punjab National Bank (PNB) sanctioned ₹2.00 crores as Term Loan and ₹1.50 crores as Working Capital Loan to DLS Industries Limited on 21.11.2009. On 10.5.2011, PNB enhanced the Term Loan to ₹6.55 crores and Working Capital Loan to ₹2.50 crores. These facilities were secured by hypothecation of stock and book debts and collaterally secured by immovable properties of guarantors, including Sh. D. L. Sawwalakhe, Sh. Dhananjay Barokar, Mrs. Pranita D Sawwalakha, and M/s. Rice City Land Developers. The Corporate Debtor executed a Term Loan Agreement on 4.5.2010, a Supplementary Term Loan Agreement on 14.9.2012, a Deed of Hypothecation on 4.5.2010, and a Letter of Mortgage on 12.5.2010. D. L. Sawwalakhe and Jagdish H. Noukaria executed Guarantee Deeds on 4.5.2010. The

…

## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is complete and …

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

…

**Reasoning:** The Bench observed that the Corporate Debtor defaulted in making payments and the

…

**Interpretation:** Section 7(2) of the IBC states that if the Adjudicating Authority is satisfied

…

**Application:** The court found that the application was complete and that a default had

…

## Parties

- **Judges:** B.S.V. Prakash…; V. Nallasen…
- **Appellants:** Punjab National…
- **Respondents:** DLS Industries…
- **Advocates:** Vinit J.…

## Timeline

- **2009-11-21 — Loan Sanc…**: Punjab National Bank sanctioned ₹2.00 crores as Term Loan and ₹1.50 crores as Working…
- **2011-05-10 — Loan Enhan…**: Punjab National Bank enhanced the Term Loan to ₹6.55 crores and Working Capital Loan to…

## 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)

---

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/nclt-chandigarh/dls-industries-ltd-cp-no-723-ibp-nclt-mah-2017-0658dc4f