# In the matter of Sicom Investments and Finance Ltd. Vs. Rajesh Kumar Drolia and Another Summons for judgment No. 221 of 2010 in Coommercial Suit No. 44 of 2010

> HC judgment dated 2017-11-28. Citation: TCN-2017-HC-00004. The case involves a commercial suit filed by Sicom Investments and Finance Ltd against Rajesh Kumar…

- **Court:** HC
- **Order date:** 28 Nov 2017
- **Citation:** TCN-2017-HC-00004
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/sicom-investments-and-finance-ltd-vs-rajesh-kumar-drolia-and-another-summons-for-00d97c2b

## Summary

### Background

The case involves a commercial suit filed by Sicom Investments and Finance Ltd against Rajesh Kumar Drolia and Another, based on two separate Deeds of Guarantee executed by the defendants in December 2008. These guarantees were for a short-term loan of Rs. 4 Crores advanced to Today's Writing Products Limited (now Today's Writing Instruments Limited). The principal borrower defaulted, leading to the invocation of the guarantees and the filing of the summary suit. The defendants raised defenses including the plaintiff being a subsidiary of SICOM Ltd, the plaintiff holding security of shares, and the guarantees being insufficiently stamped. An additional affidavit stated that insolvency proceedings had been initiated against the principal borrower before the NCLT,

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## Facts

Sicom Investments and Finance Ltd. filed a commercial suit against Rajesh Kumar Drolia and Another, seeking a judgment for Rs. 3,22,25,615/- plus interest. The suit is based on two Deeds of Guarantee executed by the defendants on December 17, 2008, for a short-term loan of Rs. 4 Crores given to Today's Writing Products Limited (now Today's Writing Instruments Limited). The principal borrower defaulted on the loan. The plaintiff had security in the form of pledged shares, which they claimed were insufficient to cover the dues. The principal borrower's cheque for Rs. 4 Crores was dishonored. The plaintiff issued notices to the principal borrower and the guarantors in November and December 2009, respectively. The defendants argued that the plaintiff should have approached

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## Issues and analysis

### Issue 1: Whether the moratorium under Section 14 of the IBC, 2016, applies to guarantors of a corporate …

**Ratio:** Section 14 of the IBC, 2016, imposes a moratorium on actions against the 'corporate

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**Reasoning:** The court reasoned that the language of Section 14 is clear and unambiguous, and it only

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**Interpretation:** The court interpreted Section 14 strictly, holding that it only applies to the

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**Application:** The court applied the ratio to the facts of the case, holding that the

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## Parties

- **Judges:** B. P. COLAB…
- **Appellants:** M/s. Sicom…
- **Respondents:** Today's Writing…; Rajesh Kumar…
- **Advocates:** Sharan Ja…; Suyash…; +3 more

## Timeline

- **2008-12-17 — Deeds of Guarantee…**: Defendants executed two separate Deeds of Guarantee for a short-term loan of Rs. 4 Crores…
- **2009-11-06 — Plaintiff's Advocate Letter to Principal…**: Plaintiff's advocate sent a letter to the principal borrower calling for payment of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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