# In the matter of Hotel Poonja International Private Limited CP (IB) No. 170-BB-2018

> NCLT judgment dated 2019-08-20. Citation: TCN-2019-NCLT-01894. The case involves a petition filed by Reliance Asset Reconstruction Company Limited under…

- **Court:** NCLT
- **Order date:** 20 Aug 2019
- **Citation:** TCN-2019-NCLT-01894
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/hotel-poonja-international-private-limited-cp-ib-no-170-bb-2018-33db1b77

## Summary

### Background

The case involves a petition filed by Reliance Asset Reconstruction Company Limited under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Hotel Poonja International Private Limited. The petition stems from a debt originally owed to Vijaya Bank, which was later assigned to Reliance Asset Reconstruction Company Limited. The corporate debtor defaulted on a term loan facility of Rs. 40,00,000/- granted by Vijaya Bank, leading to the account being classified as NPA on 1.04.1993. As of 18.07.2018, the outstanding amount was Rs 145,44,46,651.32. The petitioner furnished a judgement in OA No. 547/98 by Debt Recovery Tribunal dated 9th April, 2001, Recovery Certificate issued by Debt Recovery

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## Facts

Vijaya Bank sanctioned a loan of Rs. 40 lakhs to Hotel Poonja International Private Limited on 20.05.1986. The Corporate Debtor defaulted on the loan, leading to its classification as NPA on 1.04.1993. Vijaya Bank filed OA No. 547/1998 before the Debt Recovery Tribunal (DRT), Bangalore, which issued a recovery certificate on 9th April, 2001. The DRT issued another recovery certificate vide DCP No. 2691 dated 27.03.2003. Vijaya Bank assigned the loan to Reliance Asset Reconstruction Company Limited on 3rd May, 2011. An amended recovery certificate was issued on 13th May, 2011, recognizing the assignment. The Respondent had applied for loan to the tune of Rs. 40 lakhs from Vijaya Bank during 1986 and the Bank had though sanctioned Rs. 40,00,000/-, released only a sum of

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## Issues and analysis

### Issue 1: Whether the petition filed under Section 7 of the Insolvency & Bankruptcy Code, 2016, to …

**Ratio:** The legal principle applied is that the IBC, 2016 is not intended to be a substitute for

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**Reasoning:** The court reasoned that due to the ongoing disputes, the orders of the Hon'ble High Court

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**Interpretation:** The interpretation of Section 7 of the IBC, 2016, is that it allows a financial

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**Application:** In this specific case, the court applied the ratio by considering the existing

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## Parties

- **Judges:** Rajeswara Rao…; DR ASHOK KUMAR…
- **Appellants:** M/s Reliance…
- **Respondents:** M/s. Hotel Poonja…

## Timeline

- **1986-05-20 — Loan San…**: Vijaya Bank sanctioned a loan of Rs. 40 lakhs to Hotel Poonja International Private…
- **1993-04-01 — NPA Classif…**: The account of Hotel Poonja International…

## 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)

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