# In the matter of National Plywood Industries Ltd. (NPIL) C.P. (IB) No. 09-GB-2018

> NCLT judgment dated 2019-08-26. Citation: TCN-2019-NCLT-01777. The case involves a petition filed under Section 7 of the Insolvency & Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 26 Aug 2019
- **Citation:** TCN-2019-NCLT-01777
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/national-plywood-industries-ltd-npil-cp-ib-no-09-gb-2018-9443cc31

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) by Stressed Assets Stabilization Fund (SASF) against National Plywood Industries Limited (NPIL). Originally, Industrial Development Bank of India (IDBI) granted loan facilities to National Boards Limited (NBL), with NPIL acting as a corporate guarantor. NBL defaulted, leading IDBI to recall the loan and invoke the corporate guarantee. IDBI then filed O.A.27/2002 with the Debts Recovery Tribunal (DRT), Guwahati, obtaining a recovery certificate. NPIL had filed a reference before the Board for Industrial and Financial Reconstruction (BIFR), which was pending until SICA was repealed. IDBI assigned its debts to SASF, which then filed a resolution application against NPIL

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## Facts

Industrial Development Bank of India (IDBI) granted loan facilities to National Boards Limited (NBL) on 1997-03-27. National Plywood Industries Ltd. (NPIL) acted as a corporate guarantor for the loan. NBL defaulted on the loan, leading IDBI to recall the loan facility on 2001-11-09 and invoke the corporate guarantee of NPIL on 2001-12-03, demanding Rs. 5,42,94,868. IDBI filed O.A.27/2002 with the Debts Recovery Tribunal (DRT), Guwahati, and obtained a recovery certificate dated 2005-01-05. NPIL had filed a reference before the Board for Industrial and Financial Reconstruction (BIFR), which was pending until 2016-11-30 when SICA was repealed. IDBI assigned its debts to Stressed Assets Stabilization Fund (SASF) on 2004-09-30. SASF filed a resolution application against

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## Issues and analysis

### Issue 1: Whether the application filed by …

**Ratio:** The limitation period is calculated from the date the cause of action accrues. The repeal

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**Reasoning:** The court reasoned that since the BIFR proceedings terminated on 2016-12-01, the cause of

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**Interpretation:** The interpretation hinges on when the cause of action arose. The court

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**Application:** The court applied the principle that the limitation period starts when the

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## Parties

- **Judges:** Hari Venkata…; Ashutosh C…
- **Appellants:** Stressed Assets…
- **Respondents:** National Plywood…; National Plywood…

## Timeline

- **1997-03-27 — Loan Facility…**: Industrial Development Bank of India (IDBI) granted loan facilities to National Boards…
- **2001-11-09 — Loan Facility…**: IDBI recalled the loan…

## 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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