# In the matter of Doshi Holdings Private Limited C.P. (IB) 1220/MB/2020

> NCLT judgment dated 2021-02-19. Citation: TCN-2021-NCLT-02979. Anand Rathi Global Finance Limited filed a Company Petition seeking to initiate the Corporate…

- **Court:** NCLT
- **Order date:** 19 Feb 2021
- **Citation:** TCN-2021-NCLT-02979
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/doshi-holdings-private-limited-cp-ib-1220mb2020-ac75af82

## Summary

### Background

Anand Rathi Global Finance Limited filed a Company Petition seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Doshi Holdings Private Limited, alleging default in payment of Rs. 8,35,25,398/-. The petitioner, a Non-Banking Financial Company, had extended loan facilities to Premier Limited, with Doshi Holdings as a co-borrower, under Loan cum Pledge Agreements. The corporate debtor pledged 53,01,000 shares held by it in Premier Limited in favor of the Petitioner to secure the repayment of amounts disbursed under the Loan Agreements. The petitioner invoked Section 7 of the Insolvency & Bankruptcy Code, 2016.

## Facts

Anand Rathi Global Finance Limited (Petitioner), a Non-Banking Financial Company, extended loan facilities to Premier Limited, with Doshi Holdings Private Limited (Corporate Debtor) as a co-borrower, under Loan cum Pledge Agreements. The petitioner granted a loan of ₹3,00,00,000/- under the Loan cum Pledge Agreement dated 2015-06-29 for a period of 6 months. The amount was disbursed to the Corporate Debtor on 2015-06-29. The tenure of the Loan cum Pledge Agreement dated 2015-06-29 was extended by a period of 6 months up to 2016-06-28 through an addendum dated 2015-12-28 and the same was further extended by a period of 24 months up to 2018-06-28 through an addendum dated 2016-03-31. The petitioner granted a loan of ₹2,00,00,000/- under another Loan cum Pledge Agreement

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## Issues and analysis

### Issue 1: Whether the 'Corporate Insolvency Resolution Process' can be initiated against a 'Corporate …

**Ratio:** The liability of the principal borrower and the guarantor is coextensive under Section

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**Reasoning:** The NCLT relied on the judgment of Hon'ble NCLAT in Company Appeal No. 633 of 2020, which

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**Interpretation:** This means that a creditor can initiate CIRP against a guarantor even if the

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**Application:** In this case, the Corporate Debtor is the co-borrower/guarantor, and the CIRP

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## Parties

- **Judges:** SUCHITRAKAN…; Chandra Bha…
- **Appellants:** Anand Rathi…
- **Respondents:** Doshi Holdings…

## Timeline

- **2015-06-29 — Loan cum Pledge…**: Loan cum Pledge Agreement dated…
- **2015-06-29 — Disbursement…**: Loan amount disbursed to…

## 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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