# In the matter of Dilip Ramchandra Mohite
Vs. Edelweiss Asset Reconstruction Company Ltd. & Anr. Company Appeal (AT) (Insolvency) No. 860 of 2021

> NCLAT judgment dated 2022-09-20. Citation: TCN-2022-NCLAT-00197. The case involves an appeal against the Adjudicating Authority's decision to admit a petition…

- **Court:** NCLAT
- **Order date:** 20 Sept 2022
- **Citation:** TCN-2022-NCLAT-00197
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/dilip-ramchandra-mohite-vs-edelweiss-asset-reconstruction-company-ltd-anr-compan-65436bb0

## Summary

### Background

The case involves an appeal against the Adjudicating Authority's decision to admit a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016. The appellant, Dilip Ramchandra Mohite, is the guarantor of a loan sanctioned to Telsar Construction Private Limited by Abhyudaya Cooperative Bank Ltd. The loan was classified as an NPA, and recovery proceedings were initiated. A settlement was attempted but not fully adhered to. The debt was assigned to Edelweiss Asset Reconstruction Company Ltd. The Adjudicating Authority admitted the petition, leading to the current appeal by the guarantor.

## Facts

On 2011-10-28, a loan of Rs.45Crores was sanctioned to Telsar Construction Private Limited by Abhyudaya Cooperative Bank Ltd. Dilip Ramchandra Mohite and Anand Shaktikumar Sancheti were personal guarantors. DM Cooperative Private Limited provided a corporate guarantee. The account was classified as an NPA on 2013-05-31. The bank initiated SARFAESI Act proceedings and filed a Recovery Suit. A settlement was attempted on 2014-02-14, but not adhered to. A fresh notice was issued on 2015-03-03. The bank filed MA 17/2015 for a Recovery Certificate, issued on 2015-04-25 for Rs.23,69,54,603. On 2018-03-12, the borrower offered a Rs.16Crores settlement, and Rs.8Crores was paid. The debt was assigned to Edelweiss Asset Reconstruction Company Ltd. on 2019-03-18. A warrant of

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## Issues and analysis

### Issue 1: Whether the Appellant/Guarantor is liable to pay the amount when the Guarantee was initially …

**Ratio:** The liability of the surety is co-extensive with that of the principal debtor, unless

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**Reasoning:** The court reasoned that the guarantee was invoked on 2015-03-03, and the appellant agreed

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**Interpretation:** The court interpreted the guarantee as a continuing one, meaning that the

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**Application:** The court applied the principle of co-extensive liability to the facts of the

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## Parties

- **Judges:** Anant Bijay…; Shreesha…
- **Appellants:** Dilip Ramchandra…
- **Respondents:** DM Corporation…; Edelweiss Asset…

## Timeline

- **2011-10-28 — Loan Sanc…**: Rs.45Crores/- was sanctioned to Telsar Construction Private Limited by Abhyudaya…
- **2013-05-31 — Account Classified as…**: The account of the Borrower…

## 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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