# In the matter of Parental Drugs (India) Limited CP (IB) 690-MB-C-I-2020

> NCLT judgment dated 2023-02-09. Citation: TCN-2023-NCLT-04688. The case involves a petition filed by Punjab National Bank under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 9 Feb 2023
- **Citation:** TCN-2023-NCLT-04688
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/parental-drugs-india-limited-cp-ib-690-mb-c-i-2020-0247468a

## Summary

### Background

The case involves a petition filed by Punjab National Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Parental Drugs India Limited. The petition was filed based on the corporate debtor's failure to repay credit facilities amounting to Rs. 106,11,52,000/-. The financial creditor claimed a total default amount of Rs. 196,59,72,591/- as of 31.12.2019, with the date of default being 31.03.2016. The corporate debtor had availed credit facilities from a consortium of banks including State Bank of India and Dena Bank. The Financial Creditor issued a demand notice on 07.06.2018 under the provisions of SARFAESI. The Corporate Debtor has admitted its liability and the same is recorded in

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## Facts

Punjab National Bank (PNB) filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Parental Drugs India Limited. PNB claimed that Parental Drugs had defaulted on credit facilities amounting to Rs. 106,11,52,000/-. The total amount in default, as claimed by PNB, was Rs. 196,59,72,591/- as of December 31, 2019, with the initial date of default being March 31, 2016. Parental Drugs had availed credit facilities from a consortium of banks, including State Bank of India (SBI) and Dena Bank. PNB issued a demand notice to Parental Drugs on June 7, 2018, under the SARFAESI Act. Parental Drugs admitted its liability in balance and security confirmation letters. The petition was filed

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** The Adjudicating Authority must either admit or reject the application under Section 7 of

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**Reasoning:** The Adjudicating Authority referred to the judgment of the Hon'ble Apex Court in E.S.

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to initiate

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**Application:** In this case, the Adjudicating Authority found that the application filed by

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Appellants:** Punjab National…
- **Respondents:** Parental Drugs…
- **Advocates:** Sarosh Bh…; Vijayesh…

## Timeline

- **1983-12-13 — Incorporation of…**: Parental Drugs India Limited…
- **2007-03-15 — Disbursement of Credit…**: Rs. 3,00,00,000/- disbursed…

## 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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