# In the matter of Prithvi Multipurpose Cold Storage Private Limited CP No. (IB)-11-7-JPR-2019

> NCLT judgment dated 2019-08-28. Citation: TCN-2019-NCLT-01706. United Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 28 Aug 2019
- **Citation:** TCN-2019-NCLT-01706
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/prithvi-multipurpose-cold-storage-private-limited-cp-no-ib-11-7-jpr-2019-a2970f8d

## Summary

### Background

United Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against M/S Prithvi Multipurpose Cold Storage Private Limited, claiming to be a Financial Creditor. The application seeks initiation of the Corporate Insolvency Resolution Process (CIRP) due to default in repayment of loan amount by the Corporate Debtor. The Corporate Debtor had availed various credit facilities amounting to Rs. 6,47,96,000, and the loan was to be repaid in quarterly installments. The Corporate Debtor's account was classified as NPA on 16.08.2017, and the applicant issued a demand notice under Section 13(2) of SARFAESI Act, 2002. The applicant proceeded under Section 13(4) of SARFAESI Act, 2002 and took symbolic possession of the subject

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## Facts

United Bank of India (the Applicant) claimed to be a Financial Creditor of M/S Prithvi Multipurpose Cold Storage Private Limited (the Corporate Debtor). The Applicant filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to default in repayment of loan amount. The Corporate Debtor had availed various credit facilities amounting to Rs. 6,47,96,000, vide Sanction Letter dated 03.08.2013, and had entered into various Loan Agreements all dated 03.08.2013. The loan was to be repaid in 32 quarterly installments of Rs. 16,44,000/- each starting from June 2015 quarter and ending on March 2023. The Corporate Debtor's account was classified

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## Issues and analysis

### Issue 1: Whether the application filed by the United Bank of India under Section 7 of the Insolvency and …

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

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**Reasoning:** The Tribunal considered the application and documents filed by the applicant and found

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

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**Application:** The Tribunal found that the applicant, United Bank of India, had met the

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## Parties

- **Judges:** POONDLA BHASKARA…; RaghuNa…
- **Appellants:** United Bank of…
- **Respondents:** M/S Prithvi…

## Timeline

- **2008-04-16 — Power of At…**: Power of Attorney dated 16.04.2008 authorized Mr. Rajendra Kumar Gupta to file the…
- **2013-08-03 — Sanction Letter and…**: Sanction Letter dated 03.08.2013 and various Loan Agreements all dated 03.08.2013 were…

## 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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