# In the matter of POMMYS GARMENTS (INDIA ) LIMITED

> NCLT judgment dated 2025-05-02. Citation: TCN-2025-NCLT-00130. 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-00130
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pommys-garments-india-limited-7d269e61

## 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 corporate debtor is a limited company incorporated under the Companies Act, 1956, engaged in the business of garments manufacturing and marketing. The financial creditor claimed a default amount of Rs. 35,49,25,597 as of March 31, 2022. The corporate debtor, represented by its directors, Mr. K Raja and Mr. Inico Inbaraj, had availed various loan facilities from the financial creditor, including OCC/ODBD loans and working capital loans. The financial creditor issued a demand notice under

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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 CIRP against Pommys Garments (India) Limited, the corporate debtor. The corporate debtor is a limited company incorporated under the Companies Act, 1956, engaged in garments manufacturing and marketing. The financial creditor claimed a default of Rs. 35,49,25,597 as of March 31, 2022. The corporate debtor had availed various loan facilities, including OCC/ODBD loans and working capital loans, from the financial creditor. Key dates and loan details include: OCC/ODBD Loan of Rs. 10 Crores on 2019-06-10, OCC/ODBD Loan enhancement to Rs. 15 Crores on 2019-10-14, Fresh WCDL – CCS Loan of Rs. 1.5 Crores on 2020-08-26, Fresh WCDL – GECL Loan of

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, should be …

**Ratio:** The Adjudicating Authority is bound to admit the application under Section 7 if there is

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**Reasoning:** The Adjudicating Authority considered the documents submitted by the financial creditor,

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

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**Application:** In this case, the financial creditor provided sufficient evidence to prove the

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## Parties

- **Judges:** JYOTI KUMAR…; RAVICHANDRAN…
- **Appellants:** Canara…
- **Respondents:** PommYS GARMENTS…

## Timeline

- **2019-06-10 — OCC/ODBD…**: OCC/ODBD Loan of Rs. 10 Crores…
- **2019-10-14 — OCC/ODBD Loan…**: Enhancement of Credit Limit from…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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