# In the matter of Brahm Alloys Private Limited

> NCLT judgment dated 2024-04-23. Citation: TCN-2024-NCLT-01634. Punjab National Bank (PNB) initiated a Corporate Insolvency Resolution Process (CIRP) against…

- **Court:** NCLT
- **Order date:** 23 Apr 2024
- **Citation:** TCN-2024-NCLT-01634
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/brahm-alloys-private-limited-59ff7ab0

## Summary

### Background

Punjab National Bank (PNB) initiated a Corporate Insolvency Resolution Process (CIRP) against Brahm Alloys Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. PNB claimed a default of Rs. 65,06,31,483/- as of 31.12.2019. The corporate debtor had availed cash credit facilities and a car loan from PNB. Despite several requests, the corporate debtor failed to regularize its accounts, leading PNB to classify the accounts as Non-Performing Assets (NPA) effective from 16.09.2019. The corporate debtor argued that there was a concluded settlement (OTS) between the parties for Rs. 36 Crore, and they were ready and willing to make the payment. However, PNB rejected the OTS proposal due to the corporate debtor's failure to submit the upfront payment.

## Facts

Punjab National Bank (PNB) granted a cash credit facility of Rs. 5 Crore to Brahm Alloys Private Limited on 15.09.2007, which was later enhanced to Rs. 60 Crore. A car loan of Rs. 12 Lakh was also disbursed on 23.08.2017. The corporate debtor failed to operate the accounts regularly, leading PNB to classify them as NPA on 16.09.2019. PNB claimed a total default of Rs. 65,06,31,483/- as of 31.12.2019. The corporate debtor proposed an OTS for Rs. 36 Crore on 03.07.2021, with an upfront payment of 10%. Jaishree Steel Pvt. Ltd., the investor of the corporate debtor, furnished post-dated cheques for Rs. 3.6 Crore. PNB requested that the cheques be issued from the account of Brahm (Alloys) Ltd. instead of Jaishree Steel Pvt. Ltd. PNB rejected the OTS proposal on 23.03.2022,

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable …

**Ratio:** A concluded settlement requires both parties to adhere to the agreed-upon terms. Failure

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**Reasoning:** The NCLT found that the corporate debtor failed to make the upfront payment as required

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**Interpretation:** The court interpreted the OTS proposal as a conditional agreement, where the

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**Application:** In this case, the corporate debtor's failure to make the upfront payment,

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Appellants:** Punjab National…
- **Respondents:** Brahm Alloys…

## Timeline

- **2007-09-15 — Cash Credit Facility…**: Punjab National Bank granted a Cash Credit of…
- **2017-08-23 — Car Loan Di…**: A Car Loan of Rs. 12 Lakh was…

## 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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