# In the matter of Arshiya Limited

> NCLT judgment dated 2024-04-23. Citation: TCN-2024-NCLT-01647. Punjab National Bank filed a Company Petition (CP (IB) No. 3143/MB/2019) under Section 7 of the…

- **Court:** NCLT
- **Order date:** 23 Apr 2024
- **Citation:** TCN-2024-NCLT-01647
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/arshiya-limited-f7215495

## Summary

### Background

Punjab National Bank filed a Company Petition (CP (IB) No. 3143/MB/2019) 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 financial creditor (FC) claimed a default of Rs.193,24,35,349.59 as of 13.08.2019. Arshiya Limited is the holding company of Arshiya Northern FTWZ Limited (ANFL).

## Facts

Punjab National Bank (PNB), the Financial Creditor (FC), filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Arshiya Limited, the Corporate Debtor (CD). The FC claimed a default of Rs. 193,24,35,349.59 as of 13.08.2019, including a principal amount of Rs. 103,26,02,926. 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 Pradesh. These loans were later restructured via a Master Restructuring Agreement dated 28.09.2013. The accounts of ANFL became Non-Performing Asset (NPA) on 30.09.2014. The FC declared the account of

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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 Hon'ble Supreme Court's decision in SBI Vs. Ramakrishna & Anr.

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**Interpretation:** The law is clear that simultaneous CIRP can be initiated against both the

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**Application:** The CD's contention that the application should fail because CIRP has already

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## Parties

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

## Timeline

- **2013-09-28 — Master Restructuring…**: Loans to ANFL were…
- **2014-09-30 — Account Decla…**: The accounts of ANFL became…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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