# In the matter of Arshiya Limited

> NCLT judgment dated 2024-04-23. Citation: TCN-2024-NCLT-01637. The case pertains to a Company Petition (CP (IB) No. 3143/MB/2019) filed by Punjab National…

- **Court:** NCLT
- **Order date:** 23 Apr 2024
- **Citation:** TCN-2024-NCLT-01637
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/arshiya-limited-3af113a2

## Summary

### Background

The case pertains to a Company Petition (CP (IB) No. 3143/MB/2019) filed by Punjab National Bank (PNB), the Financial Creditor (FC), under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Arshiya Limited, the Corporate Debtor (CD). The FC claims a total default amount of Rs. 193,24,35,349.59 as of 13.08.2019, including a principal amount of Rs. 103,26,02,926 and interest and other charges. Arshiya Limited is the holding company of Arshiya Northern FTWZ Limited (ANFL), a Free Trade Warehousing Zone (FTWZ) developer. ANFL had availed loans from the FC to construct the FTWZ at Khurja, Uttar

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## Facts

Punjab National Bank (PNB) filed a Company Petition (CP (IB) No. 3143/MB/2019) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Arshiya Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). PNB claimed that Arshiya Limited had defaulted on a total amount of Rs. 193,24,35,349.59 as of 13.08.2019, which included a principal amount of Rs. 103,26,02,926. Arshiya Limited is the holding company of Arshiya Northern FTWZ Limited (ANFL). ANFL had taken loans from PNB to construct a Free Trade Warehousing Zone (FTWZ) at Khurja, Uttar Pradesh. The accounts of ANFL were declared Non-Performing Asset (NPA) on 30.09.2014. PNB issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and

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## Issues and analysis

### Issue 1: Whether the application filed by Punjab National …

**Ratio:** CIRP can be initiated against both the principal borrower and the corporate guarantor

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**Reasoning:** The NCLT relied on the Supreme Court's decision in SBI Vs. Ramakrishna & Anr. [(2018)

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**Interpretation:** The IBC allows for simultaneous CIRP proceedings against both the principal

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**Application:** The NCLT applied the ratio to the present case, noting that the pendency of

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** Punjab National…
- **Respondents:** Arshiya L…

## Timeline

- **2014-09-30 — ANFL Accounts Declared…**: The accounts of Arshiya Northern FTWZ Limited…
- **2015-10-14 — SARFAESI Notic…**: Punjab National Bank issued a notice under Section 13(2) of the SARFAESI Act to ANFL and…

## 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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