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

> NCLT judgment dated 2023-12-12. Citation: TCN-2023-NCLT-00276. 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-00276
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pelican-grand-motels-pvt-ltd-76502b5e

## 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 officer who signed the Section 7 petition, allegations of fraud by the Bank, and the failure to restructure the loan despite the Corporate Debtor being an MSME. The NCLT initially closed the right of the Corporate Debtor to file a reply, leading to appeals before the Delhi High Court and NCLAT. The High Court

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## Facts

Punjab National Bank (PNB) extended financial facilities to Pelican Grand Motels Pvt. Ltd. Pelican Grand Motels defaulted on repayments, leading PNB to classify the account as a Non-Performing Asset (NPA) on November 1, 2019. PNB initiated recovery proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC), claiming a total default of Rs. 34,89,40,821.30 as of July 1, 2022. Pelican Grand Motels contested the application, alleging that PNB had not complied with the pre-requisite conditions of the contract, committed fraud, and failed to restructure the loan despite being an MSME. Pelican Grand Motels also filed a civil suit against PNB. The NCLT initially closed the right of Pelican Grand Motels to file a reply, which was challenged before the Delhi High

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC was filed by a duly authorized officer of Punjab …

**Ratio:** The applicant Bank submitted various documents like Board Resolution and consequent

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**Reasoning:** The NCLT considered the documents submitted by the applicant Bank and found that the

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**Interpretation:** The legal principle is that an application under Section 7 of the IBC must be

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**Application:** In this case, the NCLT found that the applicant Bank had submitted sufficient

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## Parties

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

## Timeline

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

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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