Punjab National Bank Vs Bhagwati Rice Mills Private Limited (NCLT Allahabad)
NCLT Allahabad held that financial creditor duly established existence of financial debt and default thereon on the part of the Corporate Debtor i.e. Bhagwati Rice Mills Pvt. Ltd. hence application filed u/s. 7 for initiation of Corporate Insolvency Resolution Process admitted.
Facts- This Application has been filed on 15.01.2025 by Punjab National Bank as the Applicant/Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy Rules 2016 against M/s Bhagwati Rice Mills Private Ltd (Respondent/Corporate Debtor/Borrower) in Form 1 containing all the information as required in Part I, II, III, IV and V of the Form showing a total financial debt of Rs. 74,35,42,374/-, declaring date of default being 08.06.2023.
Conclusion- Held that the Financial Creditor has established the existence of a financial debt, its disbursement, the Corporate Debtor’s obligation to repay, and the non-payment despite recalling of the loan vide notice dated 04.01.2024. The objections raised by the Corporate Debtor, though numerous, do not deny the existence of debt or the fact of default. Applying the settled principle in Suresh Kumar Reddy v. Canara Bank (2023) 8 SCC 387, once the Tribunal is satisfied that an outstanding debt exists and a default has occurred, admission cannot ordinarily be denied. Thus, the Applicant / Financial Creditor has proved that there is a ‘debt’ and ‘default’ on the part of the Corporate Debtor and outstanding debt is more than the threshold limit of Rs. 1 crore. Hence, as per Section 7(5) of IBC, 2016, the present application is found to be fulfilling all the conditions for admissions of the Application and initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor i.e. M/s Bhagwati Rice Mills Pvt. Ltd.
