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TMI Blog2025 (1) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Writ Petition No.22367 of 2021 and Writ Petition No.11117 of 2022 filed by the CD were both heard and decided on 24.05.2024 by the Punjab and Haryana High Court. The High Court CENTRAL BANK OF INDIA AND M/S KAUR SAIN SPINNERS LTD. VERSUS UNION OF INDIA AND OTHERS [ 2024 (6) TMI 714 - PUNJAB AND HARYANA HIGH COURT ] has noted the order PUNJAB NATIONAL BANK (SUCCESSOR OF ORIENTAL BANK OF COMMERCE) THROUGH MR. ASHISH VERMA CHIEF MANAGER OVERSEAS BRANCH, INDUSTRIAL AREA-A, LUDHIANA VERSUS M/S. KAUR SAIN SPINNERS LTD. [ 2024 (5) TMI 1507 - NATIONAL COMPANY LAW TRIBUNAL CHANDIGARH] , by which Section 7 Application was admitted. The High Court has held in the judgment that by virtue of order of admission under Section 7 of IBC, both the Writ Petitions have become infructuous. The Writ Petition was decided by the Punjab and Haryana High Court on 24.05.2024. The submission made on behalf of the CD before the Adjudicating Authority to defer the hearing of Section 7 Application, has become infructuous. The Adjudicating Authority having found the debt and default, there are no error admitting Section 7 Application. The submission of the Appellant that under inter-se Agreement it was only th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Bansal, IP as Respondent No.3. The Memo of Parties is not described properly. Accordingly, we direct that the Memo of Parties of the Appeal be corrected, Central Bank of India as Respondent No.1; Punjab National Bank as Respondent No.2 and Mr. Nipan Bansal, IRP as Respondent No.3. 2. Brief background facts giving rise to the Appeal need to be noticed: (i) The Corporate Debtor ( CD ) was extended a loan by Consortium of Bank, consisting of Oriental Bank of Commerce and Central Bank of India by an Agreement dated 06.03.2017. (ii) Central Bank of India declared the account of Corporate Debtor as NPA with effect from 30.09.2017. The Oriental Bank of Commerce, the lead Bank also declared the account of Corporate Debtor as NPA on 31.08.2017. Central Bank of India filed OA No.3000 of 2018 before Debts Recovery Tribunal ( DRT ) for recovery of its outstanding dues. Oriental Bank of Commerce also filed OA No.3249 of 2019 against the CD. (iii) Section 7 Application was filed by Central Bank of India praying for initiation of CIRP against CD on 19.09.2018. Section 7 Application was also filed by Oriental Bank of Commerce (Now Punjab National Bank) against the CD. (iv) In the proceedings bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard learned Counsel for the parties. 4. When the Appeal was heard by this Tribunal on 29.05.2024, a submission was advanced by learned Counsel for the Appellant that two assets of the CD have already been auctioned and an amount of Rs.136 crores have been recovered and Bank is taking steps to recover the dues by means of proceedings under Section 7, which are subject matter of writ petition. Noticing the above submission, this Tribunal passed an interim order on 29.05.2024, directing the IRP, not to take any further steps in pursuance of impugned order dated 14.05.2024 passed in CP(IB)No.184/CHD/PB/2018. Notices were also issued. Both Central Bank of India and Punjab National Bank have filed reply. The IRP has also filed its reply. 5. Learned Counsel for the Appellant challenging the order admitting Section 7 Application submits that the lead Bank, i.e. Oriental Bank of Commerce (now Punjab National Bank) had taken steps to restructure the debt and on 16.07.2018 a proposal for restructuring was accepted by the lead Bank. It is submitted that Central Bank had no jurisdiction to file Section 7 Application and it was only lead Bank, who as per inter-se Agreement, can take steps for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of default in payment of the dues by the CD. The CD has committed default in paying its debt towards several facilities extended by Punjab National Bank to the CD in the year 2017. Total dues were Rs.246,30,21,036/-, for which Section 7 Application was initiated. The account of CD was declared as NPA on 31.08.2017. The SARFAESI proceedings were also initiated. It is submitted that the Corporate Debtor has committed default and Section 7 Application has been rightly admitted by the Adjudicating Authority. 8. Learned Counsel for the IRP has also filed reply. 9. We have considered the submissions of learned Counsel for the parties and perused the record. Section 7 Application, which was filed by the Oriental Bank of Commerce, was filed in the year 2020 claiming default of Rs.246,30,21,036/-, in which Section 7 Application, a reply was filed and after hearing the parties, the Adjudicating Authority after finding debt and default has admitted Section 7 Application. The proceeding for auction, which was initiated in pursuance of Decree passed by DRT on 02.03.2020 on the Application filed by Central Bank of India, where assets were auctioned on 05.11.2021 for an amount of Rs.37. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Authority having found the debt and default, we do not find any error admitting Section 7 Application. The submission of the Appellant that under inter-se Agreement it was only the lead Bank, who could have taken steps, is also without any substance, since lead Bank, i.e., Oriental Bank of Commerce has also filed Section 7 Application, which has been admitted by the impugned order. The submission of the Appellant that Section 7 Application was filed for recovery of dues and was not maintainable, also cannot be accepted. It is well settled law that the fact that Financial Creditor has initiated proceedings before the DRT does not preclude them to take remedy under Section 7, which is a special remedy provided under the IBC. 11. The learned Counsel for the Appellant has also referred to the order of Hon ble Supreme Court dated 22.07.2024. On 22.07.2024, the Hon ble Supreme Court has passed following order: 1. The application for permission to file the Special Leave Petition is allowed. 2. We have heard Mr.P.S. Patwalia, learned Senior Counsel for the petitioner at a considerable length in support of his prayer that the High Court ought to have ordered a probe into the allegation o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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