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Judgment
Ashok Bhushan, J.
This appeal by a Suspended Director of the Corporate Debtor has been filed challenging the order dated 03.12.2025 passed by the Adjudicating Authority (National Company Law Tribunal), Allahabad Bench, Prayagraj in CP IB 24/ALD/2025. The application filed by the Punjab National Bank under Section 7 of the I&B Code has been admitted by the impugned order by appointing the Interim Resolution Professional and declaring moratorium.
Brief facts of the case giving rise to the appeal are:
The Punjab National Bank extended credit facilities including cash credit and working capital term loans which facilities were extended from time to time.
The Corporate Debtor together with Guarantor and Mortgager executed various security documents.
On account of default being committed by the Corporate Debtor, the account of Corporate Debtor classified as NPA on 08.06.2023.
A Recall Notice dated 04.01.2024 was issued to the Corporate Debtor. The Financial Creditor has also initiated proceeding under Debts Recovery Tribunal, Allahabad by filing OA No.296 of 2024.
Application under Section 7 was filed by the Financial Creditor claiming default of Rs.74,35,42,374/- as on 30.11.2024. Date of default as per NeSL data was mentioned as 08.06.2023.
Reply was filed to the Section 7 application by the Corporate Debtor. The Adjudicating Authority after hearing the parties, by impugned order has admitted the Section 7 application. Aggrieved by which order this appeal has been filed.
In the appeal, the Appellant filed an Additional Affidavit on 22.12.2025 and 03.01.2026 stating that Appellant is making all considerable efforts to settle the dispute with the Financial Creditor. Along with the Affidavit filed on 03.01.2026, copy of proposal dated 30.12.2025 was placed on record where OTS was submitted for an amount of Rs.29 Crores with the schedule of payments indicated in the letter. On 05.01.2026, learned counsel for the Bank had submitted that OTS proposal received from the Appellant has not been accepted, which has been communicated to the Appellant.
Learned counsel for the Appellant challenging the order submits that the date of default mentioned in the Section 7 application was not correct date and date of NPA cannot be taken as date of default. Application was also filed after expiry of the limitation period. Debt and default has not been proved by the Financial Creditor before the Adjudicating Authority.
Learned counsel for the Bank refuting the submissions of learned counsel for the Appellant submits that application was filed within the period of limitation. In the application under Section 7 date of default was rightly mentioned as 08.06.2023 which date was also reflected in the NeSL record. Appellant was sanctioned facilities of Rs.66 Crores vide various sanction orders and default was committed. The Adjudicating Authority has considered the issue of limitation and has rightly come to the conclusion that date of default being 08.06.2023, application which has been filed on 15.01.2025 was well within time.
We have considered the submissions of learned counsel for the parties and perused the record.
The fact that the Corporate Debtor is in default is clearly proved by various offers of the OTS as relied by the Appellant in this appeal. As noted above, Appellant even after passing of the order dated 03.12.2025 have submitted OTS proposal on 30.12.2025, which has not been accepted by the Bank. Prior to aforesaid OTS proposal, the Corporate Debtor has earlier also submitted several OTS proposals which are detailed in the affidavit which were not accepted by the Bank. Submission of OTS proposal is clear proof of default by the Corporate Debtor.
The Adjudicating Authority has framed question, “Whether there is debt and default within the meaning of the IBC, 2016?” and has dealt the said aspect and has come to the conclusion that outstanding debt is more than Rs.1 Crore. The Adjudicating Authority has also referred to NeSL record, where default of Corporate Debtor is recorded. The claim of the Corporate Debtor is that it deposited huge amount before the Financial Creditor but no statement of account or reconciliation has been produced. The Adjudicating Authority has rightly placed reliance on the judgment of Hon’ble Supreme Court in “M. Suresh Kumar Reddy v. Canara Bank, (2023) 8 SCC 387” that once the Tribunal is satisfied that an outstanding debt exists and a default has occurred, the Adjudicating Authority had to admit the Section 7 application. We, thus, are of the view that no grounds have been made out in this appeal to interfere with the impugned order. Appeal is dismissed.