# In the matter of Telstar Industries Pvt. Ltd. CP (IB) No. 179-7-NCLT-AHM-2019

> NCLT judgment dated 2021-04-15. Citation: TCN-2021-NCLT-02372. Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 15 Apr 2021
- **Citation:** TCN-2021-NCLT-02372
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/telstar-industries-pvt-ltd-cp-ib-no-179-7-nclt-ahm-2019-0f314576

## Summary

### Background

Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Telstar Industries Private Limited, the Corporate Debtor, to initiate the Corporate Insolvency Resolution Process (CIRP). The application was based on the Corporate Debtor's default in paying a financial debt of Rs. 8,39,68,045.92, with the date of default being 27.12.2014. The Corporate Debtor argued that the application was not maintainable due to discrepancies in the date of default and that the bank had wrongly declared the loan account as NPA, a matter already decided by the Debts Recovery Tribunal and the Bombay High Court. The Corporate Debtor also contended that the application was time-barred.

## Facts

Punjab National Bank (PNB), the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Telstar Industries Private Limited, the Corporate Debtor. The basis for the application was the Corporate Debtor's default in paying a financial debt of Rs. 8,39,68,045.92, with the default date being 27.12.2014. PNB had granted loan facilities to Telstar Industries, which the latter failed to repay as agreed. Consequently, PNB initiated recovery proceedings in the Debts Recovery Tribunal (DRT), Ahmedabad. The Corporate Debtor contested the application, arguing that the date of default was incorrectly stated, the application was not filed by a properly authorized

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, is …

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

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**Reasoning:** The NCLT considered the submissions of both parties and found that the Corporate Debtor

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**Interpretation:** Section 7 provides the mechanism for financial creditors to trigger the

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**Application:** The NCLT applied Section 7 to the facts of the case, finding that the Financial

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Punjab National…
- **Respondents:** Telstar Industries…
- **Advocates:** Ketan M.…; Sandip…

## Timeline

- **2010-11-03 — Loan Disbur…**: Financial Creditor/Bank granted and disbursed loan in the form of cash/credit and over…
- **2014-12-27 — Date of D…**: The Corporate Debtor committed default in…

## 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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