Central Bank of India Pvt. Ltd. Vs Narmada Extrusions Pvt. Ltd. (NCLT Indore)
NCLT Indore held that pendency of proceedings before the Debt Recovery Tribunal is not a bar to initiation of proceedings under the Code. Accordingly, application u/s. 7 of IBC admitted as existence of financial debt and occurrence of default thereon by corporate debtor duly established by financial creditor.
Facts- This Company Petition has been filed by Central Bank of India (“Financial Creditor”), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Narmada Extrusion Limited (“Corporate Debtor”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for having committed a default in payment of its financial debts amounting Rs. 95,31,92,434/- as on 14.11.2024.
Conclusion- In view of the failure of the Corporate Debtor to comply with the stipulated conditions, the permission granted for holding-on operations was subsequently withdrawn by the Financial Creditor. Therefore, such temporary accommodation granted by the Bank cannot be construed as altering the occurrence of default or the classification of the account as NPA.
The Hon’ble NCLAT in Sundaravadivelu v. Indian Overseas Bank (Comp. App (AT) (CH) (INS) No.143 of 2022) and in State Bank of India v. Abhijeet Ferrotech Ltd., (2024) ibclaw.in 428 NCLAT, has held that the pendency of proceedings before the Debt Recovery Tribunal is not a bar to initiation of proceedings under the Code.
