Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCLT) 558

NATIONAL COMPANY LAW TRIBUNAL
Labh Singh, Judicial Member, Rekha Kantilal Shah, Technical Member
PUNJAB NATIONAL BANK – Appellant
Versus
M/S. RAJARAMSEVAK MULTIPURPOSE COLD STORAGE PVT. LTD. – Respondent
C.P. (IB) - 318/2024

Advocates:
For the Appellants/Petitioners: Mr. Shaunak Mitra, Adv.
For the Respondents: Ms. Snehasish Chakraborty, Adv., Ms. Manju Bhuteria, Sr. Adv., Ms. Meenakshi Manot, Adv., Ms. Rajesh Upadhyay, Adv., Ms. Surabita Biswas, Adv., Mr. S. Kundu, Adv.

Date of default specified in demand notice and information utility records cannot be altered to evade Section 10A bar; application under Section 7 dismissed if default falls within 25.03.2020-24.03.2021 period.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Section 10A - Application by financial creditor for initiation of corporate insolvency resolution process - Date of default claimed as 01.09.2019 in application but recorded as 01.09.2020 in information utility record and 31.03.2020 as NPA date in demand notice - Default occurring within period 25.03.2020 to 24.03.2021 covered by Section 10A embargo - Attempt to alter date of default to evade Section 10A not permissible - Date of default as per statutory notice and information utility records cannot be changed subsequently - Application not maintainable. (Paras 49-63)

(B) Insolvency and Bankruptcy Code, 2016 - Section 7 - Default - Defined under Section 3(12) as non-payment when due - Upon NPA classification, entire debt becomes due - Existence of default proved by records of information utility or evidence furnished by financial creditor - Threshold of Rs.1 Crore satisfied. (Paras 49-50, 59-60)

(C) Insolvency and Bankruptcy Code, 2016 - Information Utility - Record of default in Form C vital document - Adjudicating authority to ascertain default from such records within 14 days. (Paras 53, 59)

Facts of the case:
Financial creditor advanced credit facilities secured by mortgage and hypothecation, enhanced over years up to Rs.20.75 crores outstanding as on 31.01.2024 with default claimed from 01.09.2019 due to non-servicing of interest and installments. Corporate debtor disputed default citing pre-NPA acknowledgments, RBI circulars on restructuring and moratorium during Covid-19, pending writ challenging NPA classification, and Section 10A bar pointing to later NPA dates in demand notice and NeSL record.

Findings of Court:
Default date as per NeSL (01.09.2020) and demand notice NPA (31.03.2020) falls within Section 10A prohibited period; application hit by statutory bar despite claimed earlier default date.

Issues: (i) Existence of default as claimed; (ii) Applicability of Section 10A; (iii) Relief. (Para 45)

Ratio Decidendi: Sanctity of default date in application, demand notice, and information utility records must be maintained; cannot be prepone to circumvent Section 10A - Default within specified Covid period bars CIRP initiation.

Result: Application under Section 7 dismissed as not maintainable.

Table of Content
1. financial creditor files section 7 application. (Para 1 , 2 , 3)
2. loan sanctions and security creation detailed. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10)
3. further loans, default, and outstanding amount claimed. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17)
4. irp proposal and evidence of default submitted. (Para 18 , 19 , 20 , 21)
5. cd objects: limitation, no default, ongoing litigation. (Para 22 , 23 , 24)
6. cd's business history and bank assurances failed. (Para 25 , 26 , 27 , 28 , 29 , 30)
7. market crisis, msme restructuring proposals ignored. (Para 31 , 32 , 33 , 34 , 35)
8. rbi covid moratorium violated by npa classification. (Para 36 , 37 , 38 , 39 , 40 , 41)
9. cd solvent; fc misusing ibc for recovery. (Para 42 , 43 , 44)
10. issues framed; parties' oral arguments summarized. (Para 45 , 46 , 47)
11. no embargo on section 7 despite sarfaesi restraint. (Para 48 , 49 , 50 , 51 , 52)
12. nesl and demand notice show default post-25.03.2020. (Para 53 , 54 , 55)
13. date of default cannot be backdated; section 10a applies. (Para 56 , 57 , 58 , 59 , 60 , 61)
14. application dismissed due to section 10a bar. (Para 62 , 63 , 64)

ORDER

Labh Singh Member(Judicial)

1. The Punjab National Bank, the Financial Creditor has filed the instant application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter to be referred as “the IBC Code”) read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity ‘the Rules’) with a prayer to trigger Corporate Insolvency Resolution Process in respect of respondent Company, M/S Rajaramsevak Multipurpose Cold Storage Pvt. Ltd, (hereinafter to be referred to as “the corporate debtor”).

2. It is appropriate to mention that the applicant Bank is a Financial Creditor constituted under the Banking Companies(Acquisition and Transfer of Undertaking) Act, 1970 having its head office at Dwarka, New Delhi and carrying on its banking business inter-alia from its Singur Branch at Ashutosh Pada Sarani, Station Road, Hooghly. The present application has been filed through Sh. Jay Shankar Kumar, Chief Manager, Sastra Division, Zonal Office Kolkata for initiation of insolvency resolution process against the respondent under the IBC Code. A copy of the letter of Authority dated 22.02.2024 Annexture-1-B has been placed on record.

3. The Corporate Debtor against whom initiation of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 15.02.2012 having its registered office situated at CF-70 Sector 1, Salt Lake City, Kolkata, West Bengal. Since the registered office of the respondent Corporate Debtor is situated at Kolkata, this Tribunal having territorial jurisdiction over the NCT of Kolkata is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process(CIRP) in respect of respondent Corporate Debtor under sub-section (1) of Section 60 of the Code.

4. Briefly stated the facts of the present Company Petition are that Corporate Debtor approached erstwhile United Bank of India, presently merged with the Financial Creditor for sanction of diverse credit facilities for potato season 2013. Considering the request, the financial creditor, as per terms and condition of Sanction letter dated 07.10.2013, sanctioned diverse credit facilities for an overall limit of Rs.11.55 crores which includes Cash Credit(Seasonal) of Rs. 4.23 crores, Working Capital Loan(Seasonal) of Rs. 0.50 crores, Term Loan (Fresh) of Rs. 6.62 crore, and Bank Guarantee of Rs. 0.20 crores.

5. That in consideration of sanction of overall credit limit of Rs.11.55 crores by the financial creditor bank, and also to secure the amount outstanding under the said facilities, the Corporate Debtor through its representative attended the Branch Office on 08.10.2013 and deposited the sale certificate in respect of the old cold storage purchased on e-auction sale held under SARFAESI Act 2002 being land admeasuring an area of 8.51 a

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2026 Supreme(Online)(NCLT) 558

NATIONAL COMPANY LAW TRIBUNALLabh Singh, Judicial Member, Rekha Kantilal Shah, Technical MemberPUNJAB NATIONAL BANK – AppellantVersusM/S. RAJARAMSEVAK MULTIPURPOSE COLD STORAGE PVT. LTD. – RespondentC.P. (IB) - 318/2024

Date of default specified in demand notice and information utility records cannot be altered to evade Section 10A bar; application under Section 7 dismissed if default falls within 25.03.2020-24.03.2021 period.

Cases Referred (1)

NATIONAL COMPANY LAW TRIBUNAL
Labh Singh, Judicial Member, Rekha Kantilal Shah, Technical Member
PUNJAB NATIONAL BANK – Appellant
Versus
M/S. RAJARAMSEVAK MULTIPURPOSE COLD STORAGE PVT. LTD. – Respondent
C.P. (IB) - 318/2024