# In the matter of PMT Machines Limited CP (IB) -2469-MB-2018

> NCLT judgment dated 2018-10-22. Citation: TCN-2018-NCLT-00521. UCO Bank, a financial creditor, filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 22 Oct 2018
- **Citation:** TCN-2018-NCLT-00521
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/pmt-machines-limited-cp-ib-2469-mb-2018-1134fbac

## Summary

### Background

UCO Bank, a financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against PMT Machines Limited, the corporate debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The petition was based on the corporate debtor's default in repaying a sum of Rs. 119,76,00,000/- as on 31.05.2018, including interest, with the date of default being 31.12.2011. The petitioner had extended credit facilities to the corporate debtor, which were renewed and enhanced over time. The petition included various security documents connected with the sanctioned facilities, such as deeds of mortgage, promissory notes, letters of continuity, and guarantees.

## Facts

UCO Bank extended credit facilities to PMT Machines Limited, which were renewed over time. On 15.04.2006, the credit facilities were renewed to Rs. 55.70 Lakhs, and subsequently on 29.08.2007, they were enhanced to Rs. 99.70 Lakhs. A final renewal letter dated 30.03.2012 indicated renewed facilities of Rs. 95.48 Crores, including cash credit, WCDL, bank guarantees, and ILC/FLC. As of the petition date, Rs. 36.96 crores were outstanding. The total outstanding amount, including interest, was Rs. 119,76,00,000/- as on 31.05.2018, with the default date being 31.12.2011. The petitioner provided security documents, including mortgages, promissory notes, letters of continuity, and guarantees. The Corporate Debtor made payments of Rs. 6,35,00,000/- and Rs. 19,20,00,000/- on

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repaying the loan availed from the Financial Creditor, …

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

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**Reasoning:** The Adjudicating Authority, upon reviewing the documents filed by UCO Bank, found that

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

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**Application:** In this case, UCO Bank presented sufficient evidence to demonstrate that PMT

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## Parties

- **Judges:** Bhaskara Pantula…; V. Nallasen…
- **Appellants:** UCO B…
- **Respondents:** PMT Machines…

## Timeline

- **2006-04-15 — Renewal of Credit…**: Petitioner renewed credit facilities…
- **2007-08-29 — Enhancement of Credit…**: Petitioner renewed and enhanced the…

## 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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