# In the matter of Punarnava Rasayan Private Limited

> NCLT judgment dated 2024-02-13. Citation: TCN-2024-NCLT-02620. GPT Pharmaceuticals Private Limited, the Financial Creditor (FC), filed an application under…

- **Court:** NCLT
- **Order date:** 13 Feb 2024
- **Citation:** TCN-2024-NCLT-02620
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/punarnava-rasayan-private-limited-a0988c26

## 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. The CD also claimed it did not receive the loan and denied the FC arranged

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## Facts

GPT Pharmaceuticals Private Limited (Financial Creditor) filed an application under Section 7 of the IBC against Punarnava Rasayan Private Limited (Corporate Debtor) to initiate CIRP. The FC claimed to have provided a loan of Rs.4,79,63,303 to the CD on 30.05.2020, with an 18% annual interest rate, based on a Loan Agreement. Repayment was scheduled in six installments from 30.05.2021 to 30.01.2022. The FC alleged a default on 30.06.2021. The CD contested the application, citing a lack of proper authorization and denying receipt of the loan. The Loan Agreement, central to the FC's case, showed discrepancies in repayment terms, with the total repayment falling short by Rs.75 lakhs. The stamp paper for the agreement was purchased three years prior to the agreement date.

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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 examined the Loan Agreement and found discrepancies in the repayment terms. The

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**Interpretation:** Section 7 requires the establishment of a valid debt and default. The court

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**Application:** Given the discrepancies in the Loan Agreement and the lack of supporting

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## Parties

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

## Timeline

- **2020-05-30 — Loan Agreeme…**: Loan Agreement signed between GPT Pharmaceuticals Private Limited and Punarnava Rasayan…
- **2020-05-30 — Loan Ext…**: Purported Loan was…

## 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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