# In the matter of Dunn Foods Pvt Ltd CP. No. 16-Chd-PB-2017

> NCLT judgment dated 2017-05-02. Citation: TCN-2017-NCLT-00868. The case pertains to an application filed by Dunn Foods Private Limited, the 'Corporate…

- **Court:** NCLT
- **Order date:** 2 May 2017
- **Citation:** TCN-2017-NCLT-00868
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dunn-foods-pvt-ltd-cp-no-16-chd-pb-2017-978d578d

## Summary

### Background

The case pertains to an application filed by Dunn Foods Private Limited, the 'Corporate Debtor', under Section 10 of the Insolvency and Bankruptcy Code, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP). The application was filed due to the company's inability to meet its financial obligations, leading to defaults with various financial institutions and operational creditors. The company's financial difficulties were compounded by notices issued under Section 13(2) of the SARFAESI Act, 2002, by Punjab National Bank and other banks, demanding the delivery of secured assets due to outstanding debts. The application was filed before the National Company Law Tribunal (NCLT), Chandigarh Bench.

## Facts

Dunn Foods Private Limited filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process (CIRP). The company's authorized share capital is ₹13,50,00,000, and its paid-up capital is ₹13,42,00,000. The company has three directors and six shareholders. The company defaulted on payments to financial institutions, leading Punjab National Bank to issue a notice dated 02.11.2016 under Section 13(2) of the SARFAESI Act, 2002. Similar notices were issued by other banks. The total outstanding amount as per the notices under Section 13(2) of the SARFAESI Act, 2002, issued by the four banks was ₹82,47,04,012.64. The company's financial statements indicate accumulated losses, significant long-term

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## Issues and analysis

### Issue 1: Whether the application filed by the Corporate Debtor under Section 10 of the Insolvency and …

**Ratio:** Section 10 of the Insolvency and Bankruptcy Code, 2016, allows a corporate debtor to file

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**Reasoning:** The NCLT examined the application filed by Dunn Foods Private Limited and found that it

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**Interpretation:** Section 10 provides a mechanism for a corporate debtor facing financial

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**Application:** In this case, the NCLT found that the application filed by Dunn Foods Private

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## Parties

- **Judges:** R.P.Nag…
- **Respondents:** Dunn Foods…
- **Advocates:** G.S. S…; Mг. Ј.К.…

## Timeline

- **2016-11-02 — Notice under Section…**: Punjab National Bank issued a notice to Dunn Foods Private Limited under Section 13(2) of…
- **2017-03-30 — Board Reso…**: Dunn Foods Private Limited passed a resolution authorizing Mr. Sunil Guglani, Director of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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