# In the matter of GHO Agro Private Limited IBA-481-2020

> NCLT judgment dated 2021-11-01. Citation: TCN-2021-NCLT-00633. Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 1 Nov 2021
- **Citation:** TCN-2021-NCLT-00633
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gho-agro-private-limited-iba-481-2020-08eba423

## Summary

### Background

Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. GHO Agro Private Limited to initiate the Corporate Insolvency Resolution Process (CIRP). The application was based on the corporate debtor's failure to repay its financial debt. The financial creditor, Punjab National Bank, claimed that the corporate debtor had defaulted on its loan obligations. The corporate debtor argued that it had made an OTS proposal, the default was not intentional, and the financial creditor had not provided a clear account of the outstanding debt. The corporate debtor also raised concerns about the financial creditor's actions, including not issuing NoC for multiple banking and arbitrarily taking funds from sanctioned amounts.

## Facts

Punjab National Bank (PNB) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against M/s. GHO Agro Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). PNB claimed that GHO Agro had defaulted on its financial debt. GHO Agro was originally a partnership firm, Adinath Dairy Co., with banking operations at HDFC Bank, later taken over by PNB in 2015. PNB's Taylors road branch initially sanctioned credit facilities. The partnership firm executed loan security documents in favor of PNB. The firm later converted into a private limited company, GHO Agro, in August 2016. The loan amount was transferred to PNB's Mylapore Branch. PNB sanctioned additional credit limits to GHO Agro, secured by loan security

…

## Issues and analysis

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

**Ratio:** The Adjudicating Authority is bound to admit the Application and as a consequence trigger

…

**Reasoning:** The tribunal considered the submissions of both parties and the documents on record. It

…

**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

…

**Application:** In this case, the tribunal found that the corporate debtor had defaulted on its

…

## Parties

- **Judges:** R. Sucha…; Anil Ku…
- **Appellants:** Punjab National…
- **Respondents:** GHO Agro Private…; M/s. GHO Agro…

## Timeline

- **2015-01-01 — PNB takes over HDFC…**: Punjab National Bank took over the banking operations of Adinath Dairy Co. (formerly with…
- **2016-08-22 — Incorporation of GHO…**: Adinath Dairy Co. was converted into a private limited company named M/s. GHO Agro…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

---

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/gho-agro-private-limited-iba-481-2020-08eba423