# In the matter of Punjab National Bank Vs. Prashanta Chandra Ratha, CP (IB) No. 49/CB/2022

> NCLT judgment dated 2023-05-09. Citation: TCN-2023-NCLT-03428. This case involves an application filed by Punjab National Bank under Section 95 of the…

- **Court:** NCLT
- **Order date:** 9 May 2023
- **Citation:** TCN-2023-NCLT-03428
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/punjab-national-bank-vs-prashanta-chandra-ratha-cp-0ec6d8ef

## Summary

### Background

This case involves an application filed by Punjab National Bank under Section 95 of the Insolvency and Bankruptcy Code (IBC) 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, to initiate the Insolvency Resolution Process against Mr. Prashanta Chandra Ratha, the personal guarantor, for the debts of M/s MAADURGA THERMAL POWER COMPANY LIMITED. The corporate debtor was admitted into Corporate Insolvency Resolution Process on 08.06.2018 under section 7 of IBC 2016 by an application filed by SREI Equipment Finance Limited by NCLT-Kolkata and was later admitted into liquidation on 25.06.2019.

## Facts

Punjab National Bank filed an application under Section 95 of the Insolvency and Bankruptcy Code (IBC) 2016 to initiate the Insolvency Resolution Process against Mr. Prashanta Chandra Ratha, the personal guarantor of M/s MAADURGA THERMAL POWER COMPANY LIMITED. The corporate debtor, Maa Durga Thermal Power Company Ltd, had availed financial facilities from Oriental Bank of Commerce (now merged with Punjab National Bank). The account of the principal borrower was declared NPA on 31.12.2014. The creditor issued a demand notice dated 06.08.2022, calling upon the personal guarantor to pay Rs. 133.11 Crores. The respondent argued that the application was barred by limitation. The corporate debtor was admitted into CIRP on 08.06.2018 and subsequently into liquidation on

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## Issues and analysis

### Issue 1: Whether the application filed under Section …

**Ratio:** The limitation period for initiating insolvency proceedings is generally three years from

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**Reasoning:** The court considered the acknowledgment of debt by the corporate debtor in a letter dated

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**Interpretation:** The interpretation of Section 95 of the IBC, along with the relevant rules and

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**Application:** In this case, the corporate debtor acknowledged the debt on 31.03.2018,

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## Parties

- **Judges:** P. Moha…; Satya Ranjan…
- **Appellants:** Punjab National…
- **Respondents:** M/s MAADURGA…; Prashanta Chandra…

## Timeline

- **2018-06-08 — CIRP Admi…**: Maa Durga Thermal Power Company Ltd was admitted into Corporate Insolvency Resolution…
- **2019-06-25 — Liquidation A…**: The corporate debtor was admitted into…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95 — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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