# In the matter of Punarnava Rasayan Private Limited

> NCLT judgment dated 2024-02-13. Citation: TCN-2024-NCLT-02627. GPT Pharmaceuticals Private Limited, the Financial Creditor (FC), filed an application under…

- **Court:** NCLT
- **Order date:** 13 Feb 2024
- **Citation:** TCN-2024-NCLT-02627
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/punarnava-rasayan-private-limited-a00d6b43

## Summary

### Background

GPT Pharmaceuticals Private Limited, the Financial Creditor (FC), filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) to initiate the Corporate Insolvency Resolution Process (CIRP) against Punarnava Rasayan Private Limited, the Corporate Debtor (CD). The FC claimed to have provided financial assistance to the CD, evidenced by a Loan Agreement dated 30.05.2020, for Rs.4,79,63,303 at 18% interest per annum. The repayment was to be made in six installments. The FC alleged that the CD defaulted on 30.06.2021, leading to the application. The CD raised objections regarding the lack of proper authorization for filing the application and questioned the commencement of CIRP. They also claimed they did not receive the loan and alleged misuse of the

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## Facts

GPT Pharmaceuticals Private Limited (FC) claimed to have extended a loan of Rs.4,79,63,303 to Punarnava Rasayan Private Limited (CD) as per a Loan Agreement dated 30.05.2020, with an 18% annual interest rate. The repayment was structured in six installments from 30.05.2021 to 30.01.2022. The FC alleged a default on 30.06.2021, leading to a Section 7 IBC application. The CD contested the application, citing a lack of proper authorization and denying receipt of the loan. The CD also alleged misuse of the IBC by the FC. The Loan Agreement, central to the FC's claim, showed discrepancies in repayment terms and lacked disbursement details. The stamp paper used for the agreement was purchased three years prior to the agreement date. The loan was not reflected in the FC's

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC for initiating CIRP against the Corporate Debtor …

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

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**Reasoning:** The court found discrepancies in the Loan Agreement, including inconsistencies in

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**Interpretation:** Section 7 requires a clear and unambiguous demonstration of debt and default.

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**Application:** Given the discrepancies in the Loan Agreement and the doubts surrounding the

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** GPT Pharmaceutical…
- **Respondents:** Punarnava Rasayan…

## Timeline

- **2017-06-20 — Purchase of St…**: Stamp paper for the Loan…
- **2020-03-31 — Outstanding…**: The Loan Agreement records that as on 31.03.2020, the outstanding amount from M/s.…

## 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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