# In the matter of Vaman Fabrics Pvt. Ltd. C.P. (I.B) No. 27-10-NCLT-AHM-2018

> NCLT judgment dated 2018-10-01. Citation: TCN-2018-NCLT-00686. M/s. Vaman Fabrics Pvt. Ltd., the corporate applicant/debtor, filed an application under…

- **Court:** NCLT
- **Order date:** 1 Oct 2018
- **Citation:** TCN-2018-NCLT-00686
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vaman-fabrics-pvt-ltd-cp-ib-no-27-10-nclt-ahm-2018-d484f354

## Summary

### Background

M/s. Vaman Fabrics Pvt. Ltd., the corporate applicant/debtor, filed an application under Section 10 of the Insolvency and Bankruptcy Code (IBC) seeking initiation of Corporate Insolvency Resolution Process (CIRP) in respect of itself. The application was filed due to the company facing a severe liquidity crisis and becoming insolvent, with a default amount of Rs. 7,34,89,392.77 occurring on 18.03.2016. Punjab National Bank (PNB), a secured creditor, opposed the application, arguing it was filed with mala fide intentions to stall debt recovery proceedings initiated by them. PNB also raised objections regarding the completeness of the application and compliance with statutory requirements.

## Facts

M/s. Vaman Fabrics Pvt. Ltd. (Corporate Debtor) filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of Corporate Insolvency Resolution Process (CIRP). The company faced a severe liquidity crisis and became insolvent. The amount of debt in default was Rs. 7,34,89,392.77, with the default occurring on 18.03.2016. Punjab National Bank (PNB), a secured creditor, opposed the application, contending it was filed with mala fide intentions to stall debt recovery proceedings initiated by them before the Debt Recovery Tribunal (DRT). PNB had initiated proceedings under the SARFAESI Act, 2002, and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The Corporate Debtor had also approached the High Court

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## Issues and analysis

### Issue 1: Whether the application filed by the Corporate Applicant under Section 10 of the Insolvency and …

**Ratio:** The Hon'ble Supreme Court and NCLAT have clarified that the Adjudicating Authority's role

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**Reasoning:** The Adjudicating Authority considered the submissions of both parties and the relevant

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**Interpretation:** Section 10 of the IBC allows a corporate debtor to initiate CIRP if it has

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**Application:** In this case, the Adjudicating Authority found that the Corporate Applicant had

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## Parties

- **Judges:** Harihar Prakash…
- **Respondents:** Vaman Fabrics…; Punjab National…
- **Advocates:** Juhi…; Aditya…; +7 more

## Timeline

- **2016-03-18 — Default…**: The corporate applicant defaulted…
- **2017-12-16 — Applicatio…**: The present application dated 16.12.2017 is filed in the Form-6 prescribed under Rule 7…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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