# In the matter of Shiv Shankar Solvent Extractions Pvt. Ltd. CP (IB) No. 85-CTB-2019

> NCLT judgment dated 2019-09-04. Citation: TCN-2019-NCLT-01564. The case involves an application filed by Punjab National Bank (PNB), the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 4 Sept 2019
- **Citation:** TCN-2019-NCLT-01564
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shiv-shankar-solvent-extractions-pvt-ltd-cp-ib-no-85-ctb-2019-fd805f46

## Summary

### Background

The case involves an application filed by Punjab National Bank (PNB), the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Shiv Shankar Solvent Extraction Pvt. Ltd, the Corporate Debtor. The Corporate Debtor defaulted in paying a financial debt of Rs. 45,53,15,156.32 as of June 30, 2019. The application was initially presented before the bench on August 5, 2019, and the Corporate Debtor was later set ex-parte on August 13, 2019, due to the return of the notice with an endorsement of 'insufficient address'.

## Facts

Punjab National Bank (PNB) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Shiv Shankar Solvent Extraction Pvt. Ltd. PNB claimed that the Corporate Debtor defaulted on a financial debt of Rs. 45,53,15,156.32 as of June 30, 2019. The Corporate Debtor is engaged in refinery and mining activities and had obtained a composite loan of Rs. 1050 Lakhs from PNB, comprising a cash credit limit of Rs. 400 Lakhs and a term loan of Rs. 650 Lakhs, since March 28, 2007. The loan was secured by hypothecation of movables and mortgage of immovables. The Corporate Debtor's loan account was declared a Non-Performing Asset (NPA) on June 30, 2010, due to non-repayment. The notice

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## Issues and analysis

### Issue 1: Whether Punjab National Bank/Financial Creditor can start Corporate Insolvency Resolution Process …

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

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**Reasoning:** The Adjudicating Authority considered the records, proceedings, and pleadings of the

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

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**Application:** In this case, Punjab National Bank, as the Financial Creditor, demonstrated the

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## Parties

- **Judges:** Sucharit…; Satya Ranjan…
- **Appellants:** Punjab National…
- **Respondents:** M/s Shiv Shankar…

## Timeline

- **2007-03-28 — Loan Sanc…**: Applicant banks sanctioned the loan and the Corporate Debtor was enjoying the facilities…
- **2010-06-30 — Account Decla…**: The Corporate Debtor did not repay the loan, hence, the loan account was declared as…

## 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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