# In the matter of CA Ritu Rastogi CA-366-(PB)-2017 Connected with (IB)-102-(PB)-2017

> NCLT judgment dated 2018-01-23. Citation: TCN-2018-NCLT-01905. ICICI Bank filed an application under Section 60(5) of the Insolvency & Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 23 Jan 2018
- **Citation:** TCN-2018-NCLT-01905
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ca-ritu-rastogi-ca-366-pb-2017-connected-with-ib-102-pb-2017-e56f22e9

## Summary

### Background

ICICI Bank filed an application under Section 60(5) of the Insolvency & Bankruptcy Code, 2016, seeking to set aside the Resolution Professional's decision to reject ICICI Bank's claim against Edu Smart Services Pvt. Ltd. (ESSL), the Corporate Debtor, which acted as a guarantor for Edu Comp Solution. DBS Bank had already initiated CIRP against ESSL under Section 7 of the Code, which was admitted on 27.06.2017. ICICI Bank had extended credit facilities to Edu Comp Solution, and ESSL furnished a guarantee in favor of ICICI Bank. When Edu Comp Solution defaulted, ICICI Bank invoked the guarantee. The Resolution Professional (RP) initially provisionally admitted ICICI Bank's claim but later rejected it, leading to the current application.

## Facts

ICICI Bank extended credit facilities to Edu Comp Solution. ESSL (Edu Smart Service Pvt. Ltd.) furnished a guarantee in favor of ICICI Bank for the loan to Edu Comp Solution. Edu Comp Solution defaulted on its loan repayment. ICICI Bank invoked the guarantee against ESSL. DBS Bank initiated CIRP against ESSL under Section 7 of the Insolvency and Bankruptcy Code, which was admitted on 27.06.2017. The Resolution Professional (RP) published a public notice inviting claims from creditors of ESSL. ICICI Bank submitted its claim to the RP for Rs. 86,45,00,000/- against ESSL as a guarantor. The RP initially provisionally admitted ICICI Bank's claim but later rejected it. The RP argued that ICICI Bank's claim against ESSL should be reduced proportionately if any amount is

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## Issues and analysis

### Issue 1: Whether ICICI Bank can be considered a 'Financial Creditor' of ESSL (Edu Smart Service Pvt. Ltd.) …

**Ratio:** The expression 'Financial Creditor' means any person to whom inter-alia the Financial

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**Reasoning:** The Tribunal reasoned that Edu Comp Solution - Principal Borrower has enjoyed the loan

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**Interpretation:** This interpretation clarifies that a guarantor's liability for a financial

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**Application:** In this case, ESSL provided a guarantee for the loan taken by Edu Comp Solution

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## Parties

- **Judges:** M. M. K…; Deepa Kr…; +1 more
- **Appellants:** ICICI Bank…
- **Respondents:** Edu Smart Service…; Edu Smart…; +1 more

## Timeline

- **2017-06-27 — Admission of Section 7…**: DBS Bank's application under Section 7 of the Insolvency and Bankruptcy Code against ESSL…
- **2017-07-11 — ICICI Bank Subm…**: ICICI Bank submitted its claim to the Resolution Professional for Rs. 86,45,00,000/-…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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