# In the matter of John Zachariah & Ors. Vs. Union of India & Ors. WP(C) No. 3081 of 2022

> HC judgment dated 2022-02-16. Citation: TCN-2022-HC-00060. The petitioners, acting as personal guarantors for the Corporate Debtor Unitek Power Solutions…

- **Court:** HC
- **Order date:** 16 Feb 2022
- **Citation:** TCN-2022-HC-00060
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/john-zachariah-ors-vs-union-of-india-ors-wp-f38862ea

## Summary

### Background

The petitioners, acting as personal guarantors for the Corporate Debtor Unitek Power Solutions India Limited, filed a writ petition seeking to quash Ext.P11 Order from the National Company Law Tribunal (NCLT), Kochi Bench. They also sought de novo adjudication of multiple CP(IBC) applications after submitting a counter affidavit. The Corporate Debtor had availed financial facilities from Federal Bank Limited, secured by the 1st petitioner's guarantee agreement, capped at ₹18 Crores. Upon the Corporate Debtor's default, Federal Bank assigned its financial assets to the 3rd respondent, an asset reconstruction company. The 3rd respondent initiated insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC) before the NCLT, Chennai, which were

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## Facts

The petitioners are personal guarantors to the Corporate Debtor, Unitek Power Solutions India Limited. The Corporate Debtor availed financial facilities from Federal Bank Limited, secured by the 1st petitioner's guarantee, capped at ₹18 Crores. The Corporate Debtor defaulted, leading Federal Bank to assign its financial assets to the 3rd respondent, an asset reconstruction company. The 3rd respondent initiated insolvency proceedings under Section 7 of the IBC before the NCLT, Chennai, which were allowed. The petitioners argued that claims against them were barred by limitation. The NCLT, Kochi Bench, initiated insolvency resolution process against the personal guarantors under Section 95(1) of the IBC, resulting in the Ext.P11 order appointing an Insolvency Resolution

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## Issues and analysis

### Issue 1: Whether the writ petition is maintainable against Ext.P11 order of the National Company Law …

**Ratio:** The Insolvency and Bankruptcy Code and the Companies Act, 2013 provide for an efficacious

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**Reasoning:** The Assistant Solicitor General of India submitted that the writ petition is not

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**Interpretation:** The availability of an alternative remedy under the IBC and Companies Act,

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**Application:** Since the petitioners have an alternative remedy of appeal to the NCLAT, the

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## Parties

- **Judges:** N. NAGA…
- **Appellants:** John Zach…
- **Respondents:** Unitek Power…; Union of…

## Timeline

- **2010-02-27 — Agreement of G…**: Agreement of Guarantee…
- **2013-03-26 — Assignment Ag…**: Assignment Agreement registered as document…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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