# In the matter of Satluj Spintex Limited

> NCLT judgment dated 2024-07-03. Citation: TCN-2024-NCLT-01080. Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 3 Jul 2024
- **Citation:** TCN-2024-NCLT-01080
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/satluj-spintex-limited-ac67be58

## Summary

### Background

Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Satluj Spintex Limited. The application was filed due to the corporate debtor's failure to repay a financial debt. The respondent, M/s Satluj Spintex Limited, was incorporated on 17.03.2010. The applicant bank sanctioned credit facilities to the respondent in 2010 and further enhanced them in 2012. The corporate debtor defaulted on its repayment obligations, leading to the bank classifying the account as NPA on 02.05.2021. The applicant bank issued recall notices and demand notices under Section 13(2) of the SARFAESI Act, 2002. The respondent resisted the application, arguing that it was

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## Facts

M/s Satluj Spintex Limited, incorporated on 17.03.2010, engaged in providing combed, carded, and open-end yarns. Punjab National Bank extended financial assistance to the company in 2010, followed by enhanced credit facilities in 2012. Sh. Sham Lal Goyal, as authorized by a resolution dated 26.10.2012, executed loaning/security documents. The bank sanctioned/enhanced/renewed/reviewed facilities over time, with sanction letters issued on various dates, including 30.09.2013, 26.12.2014, 02.02.2016, 13.07.2017, 27.06.2019, 17.04.2020, and 04.03.2021. The total debt disbursed amounted to Rs. 405,50,00,000/-. The company defaulted, with an outstanding amount of Rs. 394,22,27,684.00 as of 22.06.2023. The initial date of default was claimed as 31.01.2021, and the account was

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC, 2016 is barred by Section 10A of the IBC, …

**Ratio:** The ratio is that the date of default must fall outside the period specified in Section

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**Reasoning:** The court considered the conflicting dates of default presented by the applicant and the

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**Interpretation:** Section 10A of the IBC was interpreted to mean that no application for CIRP can

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**Application:** The court applied the ratio to the facts by examining the Records of Default

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## Parties

- **Judges:** Sh. Harnam Singh…; SH. L. N.…
- **Appellants:** Punjab National…
- **Respondents:** M/s Satluj…
- **Advocates:** Harsh…; Prajwal C…; +3 more

## Timeline

- **2010-01-01 — Financial Ass…**: Punjab National Bank sanctioned advances/credit…
- **2012-01-01 — Enhancement of Credit…**: Punjab National Bank sanctioned enhancement of existing credit facilities/grant of fresh…

## 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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