# In the matter of Savaria Roller Flour Mills Private Limited Company Petition (IB)No. 191-ALD-2017

> NCLT judgment dated 2018-06-06. Citation: TCN-2018-NCLT-01317. Punjab National Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 6 Jun 2018
- **Citation:** TCN-2018-NCLT-01317
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/savaria-roller-flour-mills-private-limited-company-petition-ibno-191-ald-2017-990d05a5

## Summary

### Background

Punjab National Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Savaria Roller Flour Mills Private Limited for initiation of the Corporate Insolvency Resolution Process (CIRP). The corporate debtor had approached the bank for financial assistance in the form of cash credit and term loans. The account of the corporate debtor was declared NPA due to continuous default in repayment of the bank loan.

## Facts

Punjab National Bank (PNB) filed a petition against M/s Savaria Roller Flour Mills Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. Savaria Roller Flour Mills had approached PNB for financial assistance, including cash credit and term loans. PNB sanctioned these facilities, and mortgages were created to secure the repayment. Over time, the cash credit limit was enhanced multiple times. However, Savaria Roller Flour Mills defaulted on repayments, leading PNB to declare the account as a Non-Performing Asset (NPA) on 30.12.2015. The outstanding amount claimed by PNB was Rs. 15,35,43,557.89 as of 09.02.2016. Savaria Roller Flour Mills objected to the application, arguing that PNB had not followed RBI guidelines in declaring the account as NPA

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## Issues and analysis

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

**Ratio:** Section 7(5)(a) of the IBC states that if the Adjudicating Authority is satisfied that a

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**Reasoning:** The NCLT found that the application filed by Punjab National Bank was complete, and there

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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 NCLT applied Section 7 of the IBC to the facts of the case and found that

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## Parties

- **Judges:** SH. V.P.…; Ms Saroj R…
- **Appellants:** Punjab National…
- **Respondents:** M/s Savaria…

## Timeline

- **2006-06-20 — Sanction…**: Sanction letter for financial assistance in the shape of Cash Credit and term loan…
- **2006-08-03 — Equitable Mortgages…**: Equitable mortgages 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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