# In the matter of Priknit Retails Limited CP (IB) No. 398-Chd-Pb-2018

> NCLT judgment dated 2019-09-11. Citation: TCN-2019-NCLT-01498. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 11 Sept 2019
- **Citation:** TCN-2019-NCLT-01498
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/priknit-retails-limited-cp-ib-no-398-chd-pb-2018-ec8fe9e8

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for the initiation of Corporate Insolvency Resolution Process (CIRP) against Priknit Retails Limited, the Corporate Debtor. The application was filed due to the Corporate Debtor's default in repayment of loan installments. The Corporate Debtor was sanctioned credit facilities on 20.09.2008 and 30.01.2009. The loan accounts were declared NPA on 31.03.2009. The bank had also filed an original application with the Debt Recovery Tribunal (DRT-I), Chandigarh, and a recovery certificate was issued. The Corporate Debtor raised the issue of limitation, stating that the debt was granted in 2008 and exceeded the limitation period of 3 years.

## Facts

State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Priknit Retails Limited. SBI had sanctioned credit facilities to Priknit Retails Limited on 20.09.2008 and 30.01.2009. These facilities included Cash Credit, Term Loans, and other credit lines. The loan accounts of Priknit Retails Limited were declared Non-Performing Assets (NPA) on 31.03.2009 due to default in repayment of installments. SBI also initiated recovery proceedings before the Debt Recovery Tribunal (DRT-I), Chandigarh, where a recovery certificate was issued on 21.07.2016. The outstanding amount as on 08.10.2011 was ₹113,37,34,402/- inclusive of interest. Priknit Retails Limited argued

…

## Issues and analysis

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

**Ratio:** Section 7(5)(a) of the Insolvency and Bankruptcy Code, 2016, states that the Adjudicating

…

**Reasoning:** The Adjudicating Authority found that the occurrence of default was evidenced by the

…

**Interpretation:** Section 7 of the IBC provides the mechanism for a financial creditor to

…

**Application:** In this case, the Adjudicating Authority was satisfied that a default had

…

## Parties

- **Judges:** Ajay Kumar…; Pradeep R.…
- **Appellants:** State Bank of…
- **Respondents:** Priknit Retails…

## Timeline

- **2008-09-20 — Sanction of Credit…**: State Bank of India sanctioned credit…
- **2009-01-30 — Sanction of Credit…**: State Bank of India sanctioned credit…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/priknit-retails-limited-cp-ib-no-398-chd-pb-2018-ec8fe9e8