# In the matter of Pelican Grand Motels Pvt. Ltd.

> NCLT judgment dated 2023-12-12. Citation: TCN-2023-NCLT-00284. Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 12 Dec 2023
- **Citation:** TCN-2023-NCLT-00284
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pelican-grand-motels-pvt-ltd-5a29f05d

## Summary

### Background

Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Pelican Grand Motels Pvt. Ltd. for a default in repayment of Rs. 34,89,40,821.30. The Corporate Debtor's account was declared as Non-Performing Asset (NPA) on 01.11.2019. The Financial Creditor issued a recall notice under Section 13(2) of the SARFAESI Act, 2002. The Corporate Debtor raised objections, including the lack of proper authorization for the application and allegations of fraud by the Bank. The NCLT initially closed the Corporate Debtor's right to file a reply, leading to appeals before the Delhi High Court and NCLAT. The High Court directed the NCLT to consider the Corporate Debtor's reply. NCLAT set aside the order dated 28.02.2023 and revived

…

## Facts

Punjab National Bank (PNB) sanctioned loans and credit facilities to Pelican Grand Motels Pvt. Ltd. The Corporate Debtor defaulted on repayments, leading to a total outstanding of Rs. 34,89,40,821.30 as of 01.07.2022. PNB declared the account as NPA on 01.11.2019 and issued a recall notice under SARFAESI Act. PNB filed a Section 7 application under the Insolvency and Bankruptcy Code (IBC) to initiate Corporate Insolvency Resolution Process (CIRP). Pelican Grand Motels opposed the application, claiming PNB committed fraud by not complying with pre-requisite conditions of the sanction letter. The Corporate Debtor also argued that it is an MSME and PNB failed to restructure the loan despite a TEV study. The Corporate Debtor filed a civil suit and a writ petition

…

## Issues and analysis

### Issue 1: Whether the Section 7 application filed by Punjab National Bank against Pelican Grand Motels Pvt. …

**Ratio:** The adjudicating authority must be satisfied that a default has occurred. The application

…

**Reasoning:** The NCLT found that the Corporate Debtor had defaulted in repayment of the financial debt

…

**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

…

**Application:** The NCLT found that Pelican Grand Motels Pvt. Ltd. had defaulted in repayment

…

## Parties

- **Judges:** Ramalingam…; AVINASH K.…; +3 more
- **Appellants:** PELICAN GRAND…
- **Respondents:** Punjab National…

## Timeline

- **2010-12-07 — Incorporation of…**: Pelican Grand Motels Pvt.…
- **2012-11-01 — Loan San…**: Punjab National Bank sanctioned a loan of Rs 19.60 Crore and Fund Based Working Capital…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pelican-grand-motels-pvt-ltd-5a29f05d