# In the matter of Renu Rresidency Private Limited Company Petition(IB)No. 391-ALD-2019

> NCLT judgment dated 2021-02-12. Citation: TCN-2021-NCLT-03061. The case involves a petition filed by Punjab National Bank under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 12 Feb 2021
- **Citation:** TCN-2021-NCLT-03061
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/renu-rresidency-private-limited-company-petitionibno-391-ald-2019-adbde367

## Summary

### Background

The case involves a petition filed by Punjab National Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s Renu Residency Private Limited. The basis for the petition is the corporate debtor's inability to liquidate its financial debt. The respondent was granted a term loan of Rs. 15,00,00,000 by the applicant on 25.09.2010. The total outstanding amount, including interest and other charges, as per bank books, was Rs. 36,24,65,947 as of 31.08.2019. The loan was to be repaid in 24 quarterly installments of Rs. 75 Lacs, commencing from 01.04.2012, but the respondent defaulted. A supplementary agreement was entered into on 08.09.2011, modifying the repayment to 20 quarterly

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## Facts

Punjab National Bank (PNB) extended a term loan of Rs. 15,00,00,000 to M/s Renu Residency Private Limited on September 25, 2010. The loan's repayment was structured into 24 quarterly installments, each amounting to Rs. 75 Lacs, with interest accruing from April 1, 2012. M/s Renu Residency Private Limited defaulted on the initial repayment installment. Subsequently, a supplementary agreement was executed on September 8, 2011, modifying the repayment schedule to 20 quarterly installments commencing in October 2013, aiming for complete repayment by 2018. However, only Rs. 10 Lacs was paid by M/s Renu Residency Private Limited towards the debt on April 5, 2014. PNB declared M/s Renu Residency Private Limited's account as a Non-Performing Asset (NPA) on March 31, 2014, due

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## Issues and analysis

### Issue 1: Whether the applicants have succeeded to establish that the amount which they have deposited, comes …

**Ratio:** Section 5(8) of the Insolvency and Bankruptcy Code (IBC) defines 'financial debt' as a

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**Reasoning:** The court considered the definition of 'Financial Debt' under Section 5(8) of the IB Code

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**Interpretation:** The interpretation of 'financial debt' under Section 5(8) of the IBC is crucial

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**Application:** In this case, the court found that the term loan granted by Punjab National

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## Parties

- **Judges:** Rajesh Daya…
- **Appellants:** Punjab National…
- **Respondents:** M/s Renu Residency…

## Timeline

- **2010-09-25 — Loan Agre…**: Punjab National Bank granted a term loan of Rs. 15,00,00,000 to M/s Renu Residency…
- **2011-09-08 — Supplementary…**: A supplementary agreement was entered…

## 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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