# In the matter of Guman Furnitures and Services Pvt.  Ltd. CP No. (IB) 45-7-JPR-2018

> NCLT judgment dated 2019-03-01. Citation: TCN-2019-NCLT-04617. Punjab National Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 1 Mar 2019
- **Citation:** TCN-2019-NCLT-04617
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/guman-furnitures-and-services-pvt-ltd-cp-no-ib-45-7-jpr-2018-846a56b4

## Summary

### Background

Punjab National Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against M/s Guman Furnitures and Services Pvt. Ltd., claiming a default of Rs. 15,21,380,048/- related to cash credit and overdraft facilities. The Corporate Debtor's registered office is located in Jaipur. The Financial Creditor sought initiation of the Corporate Insolvency Resolution Process (CIRP).

## Facts

Punjab National Bank (PNB) extended cash credit and overdraft facilities to M/s Guman Furnitures and Services Pvt. Ltd. The Corporate Debtor defaulted on payments, leading to a total outstanding amount of Rs. 15,21,380,048/-. PNB filed a petition under Section 7 of the IBC, 2016, to initiate CIRP. The account was declared NPA on 13.09.2016. Recall notices were issued on 01.10.2016. SARFAESI notices were also issued. The Corporate Debtor's registered office is located in Jaipur, placing it within the jurisdiction of the NCLT Jaipur Bench. The petition was supported by documents, including a sanction letter for a cash credit facility of Rs. 10 crores dated 21.01.2015 and an overdraft facility of Rs. 1.88 Cr. dated 19.11.2015. The petitioner also pointed out that

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## Issues and analysis

### Issue 1: Whether the petition filed by Punjab National Bank under Section 7 of the IBC, 2016, should be …

**Ratio:** Section 7 of the IBC, 2016, allows a financial creditor to initiate CIRP against a

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**Reasoning:** The Tribunal considered the documents and submissions of the petitioner, establishing a

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**Interpretation:** Section 7 of IBC, 2016 is interpreted to mean that if a financial creditor can

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**Application:** The Financial Creditor, Punjab National Bank, demonstrated a default exceeding

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## Parties

- **Judges:** SIIRI R. VARADIIAN…
- **Appellants:** Punjab National…
- **Respondents:** M/s Guman…

## Timeline

- **1991-05-29 — Power of At…**: Mr. K.C Mangal, Chief Manager of PNB,…
- **2015-01-21 — Cash Credit Facility…**: Sanction letter for Cash…

## 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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