IN THE NATIONAL COMPANY LAW TRIBUNAL

BENGALURU BENCH

(Exercising powers of Adjudicating Authority under

The Insolvency and Bankruptcy Code, 2016)

(Through physical/web based video conferencing platform)

I.A. No. 699/2024

AND

CP (IB) No.61/BB/2024

Application U/s. 60(a) of the Insolvency and Bankruptcy Code, 2016

R/w Rule 11 of the National Company Law Tribunal Rules, 2016

IN THE MATTER OF:

M/s. Prateek Apparels Private Limited

Having Registered Office at:

Apparel Park Industrial Area,

Plot no. A4, A5 & A6, Arehalli Guddahalli,

Kasaba Hobli, Doddaballapur,

Bengaluru Rural-561203 … Applicant/Corporate Debtor

VERSUS

Canara Bank

Having Head Office at:

No. 112, J.C. Road, Bengaluru-560002

Represented by Mr. Paritosh Kumar,

Chief Manager, ARM II Branch,

Canara Bank Building, 3rd Floor,

Adi Marzban Street, Ballard Estate,

Mumbai-400001

… Financial Creditor/Respondent Order delivered on: 06/12/2024

Coram: Hon’ble Mr. K Biswal, Member (Judicial)

Hon’ble Mr. Manoj Kumar Dubey, Member (Technical)

PRESENT:

For the Applicant : Shri Rohit Gupta with Shri Brilian M. For the Respondent : Shri Dhananjay Joshi (Sr. Adv.) with

Shri Purnachandra M.P

O R D E R

Per: Manoj Kumar Dubey, Member (Technical)

1. The present Application has been filed by Prateek Apparels on 30/07/2024, under section 10A r/w section 60(5) of the Insolvency and Bankruptcy Code, 2016 (for brevity ‘IBC’/Code), r/w. rule 11 of the National Company Law Tribunal Rules 2016 (herein after referred as the Applicant/Corporate Debtor), for inter alia, seeking rejection of C.P. (IB) No. 61/BB/2024 filed by Canara Bank (hereinafter referred to as ‘Financial Creditor/Respondent’).

2. The brief facts of the Application are discussed below:

i. The Applicant/ Corporate Debtor, is a Company incorporated under Companies Act, 1956, having its registered office at Plot No. A4, A5 & 4.6, Arehalli Guddadahalli, Kasaba Hobli, Doddaballapur, Bengaluru - 561203 and is engaged in manufacturing in the clothing and garment sector.

ii. The Financial Creditor/ Respondent is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 having its head office at No.112, J.C.Road, Bengaluru-560002 and inter alia having its Branch at Trinity Circle, Sankaranarayana Building, No.25. M.G. Road, Bengaluru-560001.

iii. The Applicant availed of a working capital loan from a consortium of banks initially consisting of Respondent herein and Laxmi Vilas Bank. Laxmi Vilas Bank opted out of the consortium and a second supplemental working capital consortium agreement dated 29.03.2012 was entered into, and Bank of Baroda joined the consortium as a member bank.

iv. The Respondent has filed CP (IB) No.61/BB/2024, on 01.03.2023 to initiate Corporate Insolvency Resolution Process under Section 7 of the IBC, 2016 for the default amount of Rs. 85,78,52,059 (Rupees Eighty Five Crores Seventy Eight Lakhs Fifty Two Thousand Fifty Nine Only) as on 31/12/2022 and date of default is 09.11.2020 as per part IV of Form No. 1. of the Petition, wherein the Applicant is the Corporate Debtor. The Applicant has filed present Application seeking the rejection of the C.P. on the grounds that the Petition is barred under Section 10A of the Insolvency and Bankruptcy Code, 2016.

3. The Applicant submits the Account was classified Non-Performing Asset (‘NPA’) on 31.03.2021 and it is settled position of law, that the account can be declared as an NPA, only if an account continues to remain in default for a period more than 90 days. And that, it is evident that the default ought to have occurred on or before 30^th January, 2021 in order to justify the NPA declaration done by the Bank.

4. The Applicant further submits the Financial Creditor in the Part IV of the Petition has itself mentioned that the NPA declaration is with effect from 9^th November 2020 as a consequence to the default by the Corporate Debtor. In addition, the Financial Creditor has in the said Petition categorically stated that the Corporate Debtor stopped making payments