# In the matter of POMMYS GARMENTS (INDIA ) LIMITED

> NCLT judgment dated 2025-05-02. Citation: TCN-2025-NCLT-00135. Canara Bank, a financial creditor, filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 2 May 2025
- **Citation:** TCN-2025-NCLT-00135
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pommys-garments-india-limited-35a40929

## Summary

### Background

Canara Bank, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Pommys Garments (India) Limited, the corporate debtor, due to a default on loan repayments. The financial creditor claimed that the corporate debtor had defaulted on payments amounting to Rs. 35,49,25,597/- as of March 31, 2022. The corporate debtor is a limited company incorporated under the Companies Act, 1956, engaged in the business of garments manufacturing and marketing. The financial creditor had issued a demand notice under Section 13(2) of the SARFAESI Act, 2002, followed by a possession notice under Section 13(4). The financial creditor also moved an O.A before DRT, Madurai,

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## Facts

Canara Bank, the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Pommys Garments (India) Limited, the corporate debtor. The corporate debtor had defaulted on loan repayments amounting to Rs. 35,49,25,597/- as of March 31, 2022. The corporate debtor is a limited company incorporated under the Companies Act, 1956, engaged in garments manufacturing and marketing. The financial creditor had issued a demand notice under Section 13(2) of the SARFAESI Act, 2002, followed by a possession notice under Section 13(4). The financial creditor also moved an O.A before DRT, Madurai, which is pending for adjudication. The corporate debtor had availed various loan

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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:** Section 7 of the IBC, 2016 allows a financial creditor to initiate CIRP against a

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**Reasoning:** The Adjudicating Authority considered the documents and submissions made by both the

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**Interpretation:** Section 7 of the IBC, 2016 provides a mechanism for financial creditors to

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**Application:** In this case, the Adjudicating Authority found that the financial creditor had

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## Parties

- **Judges:** JYOTI KUMAR…; RAVICHANDRAN…
- **Appellants:** Canara…
- **Respondents:** PommYS GARMENTS…
- **Advocates:** M.L. Ga…; S. Arun…; +2 more

## Timeline

- **2019-06-10 — OCC/ODBD…**: Canara Bank sanctioned OCC/ODBD Loan of…
- **2019-10-14 — OCC/ODBD Loan…**: Canara Bank enhanced the Credit Limit…

## 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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