# In the matter of P.L. Industries Private Limited

> NCLT judgment dated 2024-01-12. Citation: TCN-2024-NCLT-03129. P.L. Industries Private Limited filed an application under Section 10 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 12 Jan 2024
- **Citation:** TCN-2024-NCLT-03129
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pl-industries-private-limited-9dd30ea0

## Summary

### Background

P.L. Industries Private Limited filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against itself. The application was filed after approval from the shareholders via a special resolution dated 19.11.2022. The company, incorporated on 03.09.2013, faced financial difficulties due to the COVID-19 pandemic and other factors, leading to significant losses and inability to meet its obligations. Canara Bank, a financial creditor, opposed the application, citing various reasons, including alleged suppression of material facts and diversion of funds. The NCLT considered the arguments from both sides and analyzed the documents presented.

## Facts

P.L. Industries Private Limited, a private limited company incorporated on 03.09.2013, engaged in operating a food processing unit in Assam. The company faced financial losses due to the COVID-19 pandemic in 2019, leading to a shutdown of production activities. The company availed loan facilities from Canara Bank, which later filed recovery proceedings before the Debt Recovery Tribunal due to non-payment. The bank also initiated SARFAESI proceedings, including the sale of mortgaged property. The company filed an application under Section 10 of the IBC seeking initiation of CIRP against itself, supported by a special resolution passed by its shareholders on 19.11.2022. The company's nominal capital is Rs. 3,00,00,000.00 and paid-up capital is Rs. 2,66,35,000.00. The

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## Issues and analysis

### Issue 1: Whether the application under Section 10 of the IBC filed by P.L. Industries Private Limited is …

**Ratio:** Section 10 of the IBC allows a corporate debtor to initiate CIRP against itself, provided

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**Reasoning:** The NCLT found that the Corporate Applicant had established the existence of a default

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**Interpretation:** Section 10 of the IBC provides an opportunity for a corporate debtor facing

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**Application:** The NCLT applied the provisions of Section 10 of the IBC to the facts of the

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## Parties

- **Judges:** H.V. Subb…; Satya Ranjan…
- **Respondents:** P.L. Industries…; Canara…

## Timeline

- **2013-09-03 — Company Incor…**: P.L. Industries Private…
- **2018-01-01 — Food Processing Unit…**: The Corporate Applicant (CA) was principally engaged in operating a food processing unit,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 11 — Persons not entitled to make application](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-11)

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