Bank officer who was conferred power of attorney to initiate CIRP can file petition u/s 7 against corporate debtor: NCLT

Case Details: Punjab National Bank v. Telstar Industries (P.) Ltd. - [2021] 130 taxmann.com 240 (NCLT - Ahd.)

Judiciary and Counsel Details

• • Madan B. Gosavi, Judicial Member and Virendra Kumar Gupta, Technical Member
  • Ketan M. Parikh, Ld. Counsel, for the Petitioner. 
  • Sandip Bhatt, Ld. Counsel, for the Respondent.

Facts of the Case

In the instant case, the Financial creditor bank had a sanctioned loan to the corporate debtor. The Corporate debtor committed default in repayment of the loan. The Bank filed an instant application to initiate the corporate insolvency resolution process (CIRP) against the corporate debtor. The Corporate debtor raised a dispute that the bank officer i.e, ‘Swapnil’, who had filed instant application, was not duly authorized to file the same. The Corporate debtor also raised a dispute that the application to initiate CIRP was barred by the limitation. The Tribunal noted that by way of a general power of attorney, ‘Swapnil’ had been properly authorized to file the instant application on behalf of the bank under section 7. Thus, an instant CIRP application was to be admitted.

NCLT Held

With regard to the question of time-barred application, the NCLT noted that by way of one-time settlement firstly in 2015 and thereafter in 2016 the corporate debtor had acknowledged the debt. Thus, the instant application filed in 2019 was within a limitation period of three years and thus, the same was to be admitted.

List of Cases Referred To

• • B.K. Education of Services (P.) Ltd. v. Prag Gupta & Associates [2018] 98 taxmann.com 213/150 SCL 293 (SC)
  • Sesh Nath Singh v. Baidyabati Sheoraphuli Co-operative Bank Ltd. [2021] 125 taxmann.com 357 (SC)
  • Kishanlal Likmichand Bothra v. Canara Bank [Co. Appeal (AT) (Insolvency) No. 704 of 2020, dated 24-3-2021].