# In the matter of Shri Badri Kedar Papers Private Limited

> NCLT judgment dated 2025-04-16. Citation: TCN-2025-NCLT-00210. Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 16 Apr 2025
- **Citation:** TCN-2025-NCLT-00210
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shri-badri-kedar-papers-private-limited-37a9f2b6

## Summary

### Background

Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Shree Badri Kedar Paper Pvt Ltd, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The application was filed due to the corporate debtor's default on financial facilities availed from the bank. The corporate debtor disputed the default amount and claimed compliance with restructuring terms. The bank contended that the corporate debtor failed to adhere to the terms and conditions of the agreements, leading to the account being classified as NPA. The Corporate Debtor had also filed an application before the Hon'ble Debt Recovery Tribunal (DRT), Dehradun, under section 19 of the Recovery of Debts Due to Banks and Financial Institutions

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## Facts

Punjab National Bank (PNB) extended various credit facilities to M/s Shree Badri Kedar Paper Pvt Ltd, including term loans, cash credit facilities, and inland letters of credit, with the total outstanding debt amounting to Rs. 41,94,62,418.23 as of 31.05.2023. The Corporate Debtor defaulted on repayments, leading to the account being classified as a Non-Performing Asset (NPA) on 31.03.2021. PNB issued multiple recall notices demanding payment of the outstanding amount. The Corporate Debtor claimed that the default was due to COVID-19 and that a restructuring proposal was in place, making the NPA classification erroneous. The bank initiated recovery proceedings before the Debt Recovery Tribunal (DRT), Dehradun, and subsequently filed an application under Section 7 of

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## Issues and analysis

### Issue 1: Whether there is debt and default within …

**Ratio:** Section 3(12) of the IBC defines 'default' as non-payment of debt when whole or any part

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**Reasoning:** The Tribunal found that the Corporate Debtor had availed financial facilities from the

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**Interpretation:** The Tribunal interpreted the provisions of the IBC to mean that if a financial

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**Application:** The Tribunal applied the ratio to the facts of the case and found that the

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## Parties

- **Judges:** Ashish…; Praveen…
- **Appellants:** Punjab National…
- **Respondents:** M/s Shree Badri…

## Timeline

- **2006-02-23 — Term loan and Cash…**: Punjab National Bank sanctioned term loans and cash credit facilities to M/s Shree Badri…
- **2020-03-04 — First De…**: Corporate Debtor defaulted on…

## 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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