# In the matter of Ashok Tiwari vs. DBS Bank India Ltd. (DBIL) & Anr.

> NCLAT judgment dated 2024-07-12. Citation: TCN-2024-NCLAT-00323. The appeal challenges the Adjudicating Authority's order dated 2024-01-25, which admitted a…

- **Court:** NCLAT
- **Order date:** 12 Jul 2024
- **Citation:** TCN-2024-NCLAT-00323
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ashok-tiwari-vs-dbs-bank-india-ltd-d3e2edb4

## Summary

### Background

The appeal challenges the Adjudicating Authority's order dated 2024-01-25, which admitted a Section 7 application filed by DBS Bank India Ltd. against Abhisar Impex Pvt. Ltd., the corporate guarantor. The application was based on a recovery certificate and a corporate guarantee. The principal borrower, Vayam Technologies Ltd., obtained working capital facilities from the financial creditor, which were renewed in 2012 and 2013. Abhisar Impex executed a corporate guarantee in 2012. The principal borrower defaulted, leading to a Loan Recall Notice in 2015. The financial creditor filed an OA before the Debt Recovery Tribunal (DRT) in 2015. A settlement was reached, but the corporate debtor failed to abide by its terms. Subsequently, the financial creditor filed an MA

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## Facts

Vayam Technologies Ltd. (principal borrower) obtained working capital facilities from DBS Bank India Ltd. (financial creditor). These facilities were renewed on 2012-09-13 and 2013-11-22. Abhisar Impex Pvt. Ltd. (corporate debtor) executed a corporate guarantee on 2012-03-14 to guarantee the repayment. The principal borrower defaulted, and the financial creditor issued a Loan Recall Notice on 2015-06-20. The financial creditor filed OA No.466 of 2015 before the Debt Recovery Tribunal (DRT). A settlement was reached, allowed by order dated 2016-07-18, but the corporate debtor failed to abide by the terms. The financial creditor filed M.A No. 135/2017 before the DRT for a Recovery Certificate. The DRT issued a Recovery Certificate on 2019-07-15 for Rs. 23,29,19,212.46/-

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in admitting the Section 7 application against the …

**Ratio:** The Hon'ble Supreme Court in “Dena Bank vs. C. Shivakumar Reddy and And.- Civil Appeal

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**Reasoning:** The Adjudicating Authority relied on the order of the DRT, finding the debt and default.

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**Interpretation:** The judgment interprets Section 7 of the IBC in conjunction with the Recovery

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**Application:** The existence of a recovery certificate against the corporate guarantor,

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** Ashok T…
- **Respondents:** Abhisar Impex…; DBS Bank India…

## Timeline

- **2012-03-14 — Corporate Guarantee…**: Abhisar Impex Pvt. Ltd. executed a corporate guarantee to guarantee the repayment of the…
- **2015-06-20 — Loan Recall…**: Financial creditor issued Loan Recall Notice to the principal borrower and the corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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