# In the matter of Ind Barath Thermal Power Limited CP (IB) No. 745-7-HDB-2019

> NCLT judgment dated 2021-12-30. Citation: TCN-2021-NCLT-00005. Punjab National Bank (PNB), a financial creditor, filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 30 Dec 2021
- **Citation:** TCN-2021-NCLT-00005
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ind-barath-thermal-power-limited-cp-ib-no-745-7-hdb-2019-8d746495

## Summary

### Background

Punjab National Bank (PNB), a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 4 of the Insolvency & Bankruptcy (Application to the Adjudicating Authority) Rules, 2016, before the National Company Law Tribunal (NCLT), Hyderabad Bench, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Ind Barath Thermal Power Limited, the corporate debtor, due to default in payment of debt amounting to Rs. 327,51,72,704/-. The corporate debtor had availed credit facilities under a consortium arrangement with other lenders, secured by mortgages and hypothecation of assets. PNB classified the corporate debtor's account as a Non-Performing Asset (NPA) on 31.03.2018 and initiated steps

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## Facts

Punjab National Bank (PNB), acting as a financial creditor, initiated proceedings against Ind Barath Thermal Power Limited, the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The corporate debtor had availed credit facilities amounting to Rs. 327,51,72,704/- under a consortium arrangement with various lenders. These facilities were secured by mortgages on land and hypothecation of movable assets. The corporate debtor defaulted on its payment obligations, leading PNB to classify the account as a Non-Performing Asset (NPA) on 31.03.2018. Prior to filing the Section 7 application, PNB had issued notices under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and

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## Issues and analysis

### Issue 1: Whether a Financial Creditor, despite being a Member of Consortium can individually maintain an …

**Ratio:** Section 7(1) of the Insolvency and Bankruptcy Code (IBC), 2016, allows a financial

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**Reasoning:** The NCLT interpreted Section 7(1) of the IBC to mean that a financial creditor is not

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**Interpretation:** Section 7(1) of the IBC provides the legal basis for a financial creditor to

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**Application:** In this case, Punjab National Bank (PNB), as a financial creditor and a member

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## Parties

- **Judges:** Venkata Ramakrishn…; Veera Brahma Rao…
- **Appellants:** Punjab National…
- **Respondents:** Ind Baraath…
- **Advocates:** Sanjay…; Yogesh…; +1 more

## Timeline

- **2017-03-15 — Revival L…**: The Corporate Debtor acknowledged its liability to Punjab National Bank (PNB) in a…
- **2018-03-31 — Account Classified as…**: Punjab National Bank (PNB) classified the Corporate Debtor's account as a Non-Performing…

## 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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