# In the matter of Saraya Industries Limited IB-2628-(ND)-2019

> NCLT judgment dated 2022-05-17. Citation: TCN-2022-NCLT-02731. Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 17 May 2022
- **Citation:** TCN-2022-NCLT-02731
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/saraya-industries-limited-ib-2628-nd-2019-e09987ea

## Summary

### Background

Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Saraya Industries Limited due to an alleged default of Rs. 44,78,29,165.18. The Corporate Debtor was granted various loan facilities, and the account was marked as NPA on 31.12.2018 due to continuous default in repayment. The Respondent raised objections regarding the application's compliance with IBC provisions, including Section 215 and RBI guidelines. The Applicant contended that the Corporate Debtor had not denied the debt and default, and the objections were technical and frivolous.

## Facts

Punjab National Bank (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Saraya Industries Limited (Corporate Debtor). The Corporate Debtor was granted various loan facilities by the Applicant, and the total outstanding amount, including interest and other charges, was Rs. 44,78,29,165.18 as on 15.01.2019. The Corporate Debtor acknowledged outstanding dues of Rs. 53.17 Crores by signing a document dated 27.09.2017. The account of the Corporate Debtor was marked as NPA on 31.12.2018 due to continuous default in repayment. The Financial Creditor filed the petition after failing to realize the payment. The Corporate Debtor raised objections, including

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## Issues and analysis

### Issue 1: Whether the application filed by Punjab National Bank under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The court considered the documents submitted by the Financial Creditor and the Corporate

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**Interpretation:** Section 7 of the IBC provides the mechanism for a financial creditor to

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**Application:** The court applied Section 7 of the IBC to the facts of the case, finding that

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## Parties

- **Judges:** SHRI. P.S.N.…; RAHUL BHA…
- **Appellants:** Punjab National…
- **Respondents:** Saraya Industries…

## Timeline

- **2017-09-27 — Acknowledgment of…**: The Corporate Debtor acknowledged outstanding dues of Rs. 53.17 Crores by signing and…
- **2018-12-31 — Account Marke…**: The account of the Corporate Debtor was marked as a Non-Performing Asset (NPA) due to…

## 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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