# In the matter of PVS Textiles Private Limited CP-1433-IB-2018

> NCLT judgment dated 2019-03-08. Citation: TCN-2019-NCLT-04517. The case involves a Company Petition filed by Indian Bank (Creditor Bank) under Section 7 of…

- **Court:** NCLT
- **Order date:** 8 Mar 2019
- **Citation:** TCN-2019-NCLT-04517
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/pvs-textiles-private-limited-cp-1433-ib-2018-a82cd4ec

## Summary

### Background

The case involves a Company Petition filed by Indian Bank (Creditor Bank) under Section 7 of the Insolvency and Bankruptcy Code (IBC) for initiating Corporate Insolvency Resolution Process (CIRP) against M/s. PVS Textiles Private Limited (Corporate Debtor). The Creditor Bank claims that the Corporate Debtor defaulted in repaying an amount of ₹81,51,18,576.71 as of 31.10.2013, with applicable interest. The Corporate Debtor had availed various credit facilities since 2003, including Cash Credit, Term Loans, Bank Guarantees, and Forward Purchase Contracts.

## Facts

Indian Bank (Creditor Bank) filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. PVS Textiles Private Limited (Corporate Debtor). The Corporate Debtor allegedly defaulted on a payment of ₹81,51,18,576.71 as of 31.10.2013. The Corporate Debtor had availed credit facilities since 2003. The Creditor Bank provided dates and events to support its claim, including loan sanction letters, financial contracts, acknowledgement of debt, registration of charge, declaration of NPA, demand notices, and possession notices. The Corporate Debtor argued that the Creditor Bank had lost its statutory power to demand repayment. The Financial Creditor submitted that the Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repaying the amount of ₹81,51,18,576.71 as of 31.10.2013 …

**Ratio:** The principle is that if a corporate debtor fails to repay its debt, a default is said to

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**Reasoning:** The Tribunal observed that the Creditor Bank had furnished material disclosing the credit

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The Tribunal applied the principle to the facts by examining the evidence

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Respondents:** M/s. PVS Textiles…
- **Advocates:** S.Sethu…; A. Periy…; +3 more

## Timeline

- **2013-10-31 — Default…**: Corporate Debtor defaulted in repaying…
- **2003-10-14 — Loan Sanction…**: Loan sanction letters issued…

## 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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