# In the matter of Krishna Alex Private Limited C.P (IB) No. 1128-KB-2019

> NCLT judgment dated 2021-09-14. Citation: TCN-2021-NCLT-01126. Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 14 Sept 2021
- **Citation:** TCN-2021-NCLT-01126
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/krishna-alex-private-limited-cp-ib-no-1128-kb-2019-c0be9dd3

## Summary

### Background

Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Krishna Alex Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The financial creditor, Punjab National Bank, claimed that the corporate debtor had defaulted on payments. The corporate debtor argued against the admission of the application, citing a prior accident that caused significant losses and ongoing insurance claims, as well as a restructuring proposal submitted to the consortium of lenders. The corporate debtor also raised concerns about the pending CIRP of its corporate guarantor, Bansal Alumex Pvt. Ltd., and its potential impact on the financial creditor's claim.

## Facts

Punjab National Bank (PNB), the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Krishna Alex Private Limited, the Corporate Debtor, for initiation of Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor was incorporated on 27.06.2002. PNB had granted credit facilities to the Corporate Debtor, including a Cash Credit limit of Rs. 10.50 Crore, Bank Guarantee limit of Rs. 50.00 Lakh, Letter of Credit limit of Rs. 7.50 Crore, and Forward Contract limit of Rs. 7.50 Crore, totaling Rs. 18.88 Crores. The Corporate Debtor defaulted in payment of Rs. 11,45,39,903.94 as on 08/12/2017, and the debt was classified as Non-Performing Asset (NPA) on 17/03/2018. The total outstanding inclusive of

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## Issues and analysis

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

**Ratio:** The court relied on the judgment in Athena Energy, which held that the Code does not have

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**Reasoning:** The court reasoned that the Corporate Debtor had not denied the existence of the debt or

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**Interpretation:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial

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**Application:** The court applied the ratio and reasoning to the facts of the case, noting that

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** Punjab National…
- **Respondents:** Krishna Alex…; M/s Krishna Alex…

## Timeline

- **2002-06-27 — Incorporation of…**: Krishna Alex Private…
- **2016-07-05 — Accident at th…**: The Corporate Debtor faced a major accident due to an explosion in Ageing machine, which…

## 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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