# In the matter of Sheth Metal Pvt. Ltd. CP (IB) -153-I&BP-MB-2018

> NCLT judgment dated 2018-06-06. Citation: TCN-2018-NCLT-01318. 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-01318
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sheth-metal-pvt-ltd-cp-ib-153-ibp-mb-2018-a0c22d45

## Summary

### Background

Punjab National Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Sheth Metal Private Limited, the Corporate Debtor. The bank claimed that the Corporate Debtor had defaulted on repayment of various credit facilities granted to it, amounting to ₹33,85,20,047.32/-. The Corporate Debtor had restructured credit facilities with the bank, and the bank enclosed sanction letters and security documents related to the loan.

## Facts

Punjab National Bank (PNB) sought to initiate Corporate Insolvency Resolution Process (CIRP) against Sheth Metal Private Limited ('Corporate Debtor') due to a default in repayment of various facilities. The default occurred from 30.11.2017 onwards, amounting to ₹33,85,20,047.32/-. PNB submitted sanction letters dated 13.6.2008, 16.11.2009, 29.11.2011, and 29.6.2012, detailing the credit facilities restructured by the Corporate Debtor. These facilities included Term Loans (TL), Working Capital (WC), and other credit facilities. The latest sanction letter was dated 29.6.2012. PNB also enclosed security documents connected with the loan sanctions. A notice under Section 13(2) of the SARFAESI Act, 2002, was issued demanding ₹18,68,97,043/- as of 1.4.2013. The Corporate

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repaying …

**Ratio:** A default occurs when a debtor fails to repay a debt when it has become due and payable.

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**Reasoning:** The Adjudicating Authority examined the documents filed by Punjab National Bank,

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**Interpretation:** The term 'default' is interpreted as a failure to repay a debt obligation when

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**Application:** In this case, the Corporate Debtor's failure to repay the loan amount of

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## Parties

- **Judges:** Mr.BhaskaraPantula…; Mr.V.Nallasenapath…
- **Appellants:** Punjab National…
- **Respondents:** Sheth Metal…; Sheth Metal Pvt.…
- **Advocates:** Priyanka…; IndrajeetH…; +1 more

## Timeline

- **2017-11-30 — Default…**: Corporate Debtor committed default on 30.11.2017 onwards in repayment of various…
- **2018-03-21 — First Heari…**: The Petition was listed for hearing on 21.3.2018 wherein there was no representation by…

## 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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