# In the matter of Karnal Agricultural Industries Limited

> NCLT judgment dated 2024-12-10. Citation: TCN-2024-NCLT-00080. The case involves an application filed by Punjab National Bank (PNB), the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 10 Dec 2024
- **Citation:** TCN-2024-NCLT-00080
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/karnal-agricultural-industries-limited-65f9f4f9

## Summary

### Background

The case involves an application filed by Punjab National Bank (PNB), the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against M/S. Karnal Agriculture Industries Limited, the Corporate Debtor, for alleged default in repayment of a financial debt amounting to INR 75,98,96,552 as of March 15, 2020. The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) in 2010. A debt restructuring package was approved in 2012, but the account became irregular again, leading to SARFAESI proceedings in 2017. The Corporate Debtor proposed a One-Time Settlement (OTS) which was rejected. PNB filed the application to initiate the Corporate Insolvency Resolution Process (CIRP).

## Facts

1. Punjab National Bank (PNB) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against M/S. Karnal Agriculture Industries Limited for defaulting on a financial debt.
2. The outstanding financial debt amounted to INR 75,98,96,552 as of March 15, 2020.
3. The Corporate Debtor's account with PNB was classified as a Non-Performing Asset (NPA) in 2010 according to RBI guidelines.
4. A debt restructuring package was approved by the CDR EG on June 25, 2012, with overall financial facilities of Rs. 135,82.22 Lakhs sanctioned, including Rs. 5,423 Lakhs from PNB. A Master Restructuring Agreement was signed on December 17, 2012.
5. The accounts became irregular again, leading to PNB classifying them as NPA on September 30, 2013.
6. SARFAESI

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## Issues and analysis

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

**Ratio:** Section 238 of the IBC and Section 18 of the Limitation Act. The date of default is

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**Reasoning:** The Adjudicating Authority considered the date of NPA classification (September 30, 2013)

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**Interpretation:** The interpretation of Section 18 of the Limitation Act, as applied to IBC

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**Application:** The Corporate Debtor's OTS proposal dated July 31, 2015, and the Recovery

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## Parties

- **Judges:** SH. MANNI…; Sanjeev R…
- **Appellants:** Punjab National…
- **Respondents:** M/S. Karnal…

## Timeline

- **2010-01-01 — NPA Classif…**: The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) according…
- **2012-06-25 — Debt Restructuring…**: A debt restructuring package…

## 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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