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NCLT admits Insolvency Proceedings Over Loan Default and NPA Classification

Case Law Details

TaxGuru Citation
2025 taxguru.in 10895
Case Name
Punjab National Bank Vs Amyra Foods Private Limited (NCLT Chandigarh)
Date of Judgement/Order
Only available for paid members
Courts
NCLT
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Punjab National Bank Vs Amyra Foods Private Limited (NCLT Chandigarh)

The National Company Law Tribunal (NCLT), Chandigarh Bench, heard an application filed by Punjab National Bank (the Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Amyra Foods Private Limited (the Corporate Debtor) for default amounting to ₹35,19,53,795 as of 22.02.2021. The default date was recorded as 31.03.2018.

The Corporate Debtor, incorporated in March 2016, was engaged in trading and processing of food grains and related commodities. In 2016, it approached the Financial Creditor for several credit facilities, including a Fund-Based Working Capital limit of ₹800 lakhs, a Cash Credit-Warehouse Receipt (CC-WHR) limit of ₹700 lakhs, Term Loan-I of ₹800 lakhs, and Term Loan-II of ₹200 lakhs. These were sanctioned on 05.08.2016. The Corporate Debtor executed loan and security documents on 18.08.2016, and its immovable properties were mortgaged in the Bank’s favour. Later, the Bank enhanced the CC-WHR facility to ₹900 lakhs and sanctioned a temporary overdraft of ₹30 lakhs. Fresh security documents were executed, hypothecating stocks, book debts, and machinery.

Despite availing the facilities, the Corporate Debtor failed to maintain financial discipline, resulting in classification of the account as Non-Performing Asset (NPA) on 31.03.2018. A recall notice dated 04.05.2018 and a demand notice under Section 13(2) of the SARFAESI Act dated 14.06.2018 were issued. The Bank submitted that the total outstanding stood at ₹35.19 crores and that the application was within the limitation period.

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Author Info

CA Sandeep Kanoi
Qualification: CA in Job / Business
Company: Taxguru Consultancy
Location: Mumbai, Maharashtra
Articles Published: 21,134

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