# In the matter of Arshiya Northern FTWZ Limited CP No. (IB) 3080-MB-2019

> NCLT judgment dated 2022-12-23. Citation: TCN-2022-NCLT-00050. Punjab National Bank filed a Company Petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 23 Dec 2022
- **Citation:** TCN-2022-NCLT-00050
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/arshiya-northern-ftwz-limited-cp-no-ib-3080-mb-2019-69ea4a5c

## Summary

### Background

Punjab National Bank filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Arshiya Northern FTWZ Limited, alleging default in payment. The Corporate Debtor is a subsidiary of Arshiya Limited and a Free Trade Warehousing Zone (FTWZ) developer. They obtained financial facilities from a consortium of banks for constructing a FTWZ at Khurja District, Uttar Pradesh. The account was declared NPA on September 30, 2014. The Financial Creditor issued a notice under Section 13(2) of the SARFAESI Act, 2002, and initiated recovery proceedings at the Debt Recovery Tribunal in New Delhi. The Corporate Debtor approached the Financial Creditor with an OTS proposal, which was

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## Facts

Punjab National Bank, the Financial Creditor, filed a petition to initiate CIRP against Arshiya Northern FTWZ Limited, the Corporate Debtor, due to payment defaults. The Corporate Debtor, a subsidiary of Arshiya Limited, had availed loan facilities from a consortium of banks for a FTWZ project in Khurja, Uttar Pradesh. The account was declared NPA on September 30, 2014. The Financial Creditor initiated recovery proceedings under the SARFAESI Act. The Corporate Debtor proposed an OTS, which was later cancelled. The Corporate Debtor argued the petition was time-barred, citing the NPA date. However, the Corporate Debtor had acknowledged the debt in a Security Confirmation Letter dated September 12, 2016. The outstanding dues aggregated to Rs. 193,24,35,350/- including

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## Issues and analysis

### Issue 1: Whether the petition filed by the …

**Ratio:** An acknowledgment of debt by the Corporate Debtor extends the limitation period for

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**Reasoning:** The Adjudicating Authority noted that the Corporate Debtor had admitted its liability to

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**Interpretation:** The acknowledgment of debt creates a fresh starting point for the limitation

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**Application:** The Corporate Debtor's admission of debt on September 12, 2016, extended the

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## Parties

- **Judges:** P.N. Deshmukh…; Shyam Babu…
- **Appellants:** Punjab National…
- **Respondents:** Arshiya Northern…
- **Advocates:** Tajashree…; Adesh Ag…

## Timeline

- **2009-10-15 — Sanction…**: Sanction Letter dated 15th October…
- **2010-11-27 — Sanction…**: Sanction Letter dated 27th November 2010 for ILC sub limit of Rs. 20 Crores within Term…

## 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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