# In the matter of Vindhya Vasini Industries Limited MA 44 of 2018 In C.P. (IB)-1170(MB)-2017

> NCLT judgment dated 2018-03-20. Citation: TCN-2018-NCLT-01681. The case pertains to the insolvency resolution process initiated against Vindhya Vasini…

- **Court:** NCLT
- **Order date:** 20 Mar 2018
- **Citation:** TCN-2018-NCLT-01681
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vindhya-vasini-industries-limited-ma-44-of-2018-in-cp-ib-1170mb-2017-97a0e346

## Summary

### Background

The case pertains to the insolvency resolution process initiated against Vindhya Vasini Industries Limited by Punjab National Bank. An order was passed under Section 7 of the Insolvency Code on August 29, 2017. The Corporate Debtor's business had been closed since 2013. The Committee of Creditors (CoC) was formed, and meetings were held, but no resolution plan was received. Consequently, the CoC decided to initiate the liquidation process.

## Facts

Punjab National Bank initiated insolvency proceedings against Vindhya Vasini Industries Limited. The Corporate Debtor's business had been closed since 2013. The loan facility was granted by Punjab National Bank and Central Bank of India. A Demand Notice under SARFAESI Act was served. The Committee of Creditors was formed, but no resolution plan was received. The CoC decided to initiate the liquidation process. Smt. Saroj Singhania's property was mortgaged to the bank under the same loan agreement. The total debt was ₹41,38,06,010/-, while the realizable value of the Corporate Debtor's property was only ₹4,68,15,000/-. The total realizable value including Smt. Singhania's property was ₹17,58,15,000/-. The court considered the high haircut the banks would have to take if

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## Issues and analysis

### Issue 1: Whether the liquidation process can be initiated against the property belonging to Smt. Saroj …

**Ratio:** The principle is that if a property is mortgaged to secure a financial debt, it can be

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**Reasoning:** The court reasoned that since Smt. Singhania's property was mortgaged and the realizable

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**Interpretation:** This interprets that mortgaged properties are subject to liquidation to recover

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**Application:** The court applied this principle to the facts by authorizing the liquidator to

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** Punjab National…
- **Respondents:** Vindhya Vasini…

## Timeline

- **2017-08-29 — Order under S…**: An order was passed under…
- **2017-10-20 — Committee of Creditors…**: A Committee of…

## 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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