# In the matter of Vasudev Ispat Pvt. Ltd. CP (IB) No. 575-KB-2017

> NCLT judgment dated 2018-02-15. Citation: TCN-2018-NCLT-01821. Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 15 Feb 2018
- **Citation:** TCN-2018-NCLT-01821
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vasudev-ispat-pvt-ltd-cp-ib-no-575-kb-2017-b3eb4346

## Summary

### Background

Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Vasudev Ispat Pvt. Ltd. for initiating a corporate insolvency resolution process due to a default of Rs. 19.03 crore as of July 31, 2017. The bank, a body corporate under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, claimed that Vasudev Ispat, engaged in iron and steel production, had approached them for credit limits to set up a re-rolling mill. The bank sanctioned term loans and cash credit facilities based on the company's representations. The applicant/financial creditor had filed the application before the Debts Recovery Tribunal - II, Kolkata being case number OA/92/2015. The applicant/financial creditor has also annexed

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## Facts

Punjab National Bank (PNB) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Vasudev Ispat Pvt. Ltd. seeking to initiate the Corporate Insolvency Resolution Process (CIRP). PNB claimed that Vasudev Ispat defaulted on a payment of Rs. 19.03 crore as of July 31, 2017. PNB, a corporate body under the Banking Companies Act, had sanctioned term loans and cash credit facilities to Vasudev Ispat, an iron and steel production company, for setting up a re-rolling mill. The sanctioned facilities included a term loan of Rs. 4,90,00,000/- on March 12, 2009, another term loan of Rs. 2,83,00,000/- on March 21, 2011, and a cash credit facility of Rs. 2,40,00,000/- on March 21, 2011. Vasudev Ispat executed a Deed of Hypothecation for Rs.

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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:** The application under Section 7 of the I&B Code is maintainable if the Adjudicating

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**Reasoning:** The Adjudicating Authority found that the corporate debtor had failed to make payment

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**Interpretation:** Section 7 of the I&B Code allows a financial creditor to initiate CIRP

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**Application:** In this case, the Adjudicating Authority was satisfied that Vasudev Ispat had

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## Parties

- **Judges:** Jinan…
- **Appellants:** Punjab National…
- **Respondents:** Vasudev Ispat…

## Timeline

- **2009-03-12 — Term Loan San…**: Punjab National Bank sanctioned a term loan of Rs. 4,90,00,000/- to Vasudev Ispat Pvt.…
- **2009-08-01 — Deed of Hypot…**: Vasudev Ispat Pvt. Ltd. executed a Deed of Hypothecation for Rs. 4,90,00,000/- in favor…

## 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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