# In the matter of Pithampur Poly Products Limited C.P. (I.B) No. 421-7-NCLT-AHM-2018

> NCLT judgment dated 2020-01-03. Citation: TCN-2020-NCLT-02534. Bank of Baroda (formerly Dena Bank) filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 3 Jan 2020
- **Citation:** TCN-2020-NCLT-02534
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/pithampur-poly-products-limited-cp-ib-no-421-7-nclt-ahm-2018-9f49d522

## Summary

### Background

Bank of Baroda (formerly Dena Bank) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Pithampur Poly Products Limited, citing default in repayment of term loans and cash credit facilities. The corporate debtor was incorporated in 1994 and engaged in manufacturing PP/SDP woven sacks, Jumbo Bags, etc. The bank sanctioned term loans and cash credit facilities to the corporate debtor, with the date of default being 01/05/2000. The bank claimed total dues of Rs. 2,87,87,58,545.91 as of 08/08/2018. The corporate debtor submitted One Time Settlement (OTS) proposals, which were rejected by the bank. The corporate debtor also filed a writ petition in the High Court

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## Facts

Bank of Baroda (formerly Dena Bank) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Pithampur Poly Products Limited. The corporate debtor was incorporated on 28/07/1994 with CIN: L25202MP1994PLC008513. The nominal share capital of the company is Rs.6,00,00,000/- and the paid-up capital is Rs.4,87,40,000/-. The corporate debtor's registered office is located at Plot No. 115, Sector-ITI, Industrial Area Pithampur, District-Dhar, Madhya Pradesh. The corporate debtor is engaged in manufacturing PP/SDP woven sacks, Jumbo Bags, etc., since 1994. The bank sanctioned term loans and cash credit facilities aggregating to Rs.11,35,49,000.00/- between 27/11/1994 and 23/06/1997,

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## Issues and analysis

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

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The Adjudicating Authority considered the documents submitted by the bank, including loan

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues by

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**Application:** In this case, the Adjudicating Authority found that the bank had submitted all

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## Parties

- **Judges:** Harihar Prakash…; Prasanta Kumar…
- **Appellants:** Bank of B…
- **Respondents:** Pithampur Poly…

## Timeline

- **1994-07-28 — Incorporation of…**: Pithampur Poly Products…
- **1994-11-27 — Sanction of…**: Bank of Baroda sanctioned term loans and cash credit facilities between 27/11/1994 and…

## 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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