# In the matter of Eterna Life Sciences Private Limited CP (IB) No.680-07-HDB-2018

> NCLT judgment dated 2019-03-18. Citation: TCN-2019-NCLT-04401. The case involves a Company Petition filed by State Bank of India (Financial Creditor) against…

- **Court:** NCLT
- **Order date:** 18 Mar 2019
- **Citation:** TCN-2019-NCLT-04401
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/eterna-life-sciences-private-limited-cp-ib-no680-07-hdb-2018-a58e42f9

## Summary

### Background

The case involves a Company Petition filed by State Bank of India (Financial Creditor) against Eterna Life Sciences Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor had provided a corporate guarantee to the Financial Creditor against the repayment of limits sanctioned to M/s. Super Agri Seeds Pvt Ltd. (The Borrowers). The account of the principal borrower became NPA, and the Financial Creditor invoked the Corporate Guarantee.

## Facts

State Bank of India filed a petition against Eterna Life Sciences Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. Eterna Life Sciences had provided a corporate guarantee for loans given to M/s. Super Agri Seeds Pvt Ltd. The loans to Super Agri Seeds became non-performing assets (NPA) on 2016-05-10. The Financial Creditor invoked the corporate guarantee on 2016-12-16. The total default amount was Rs. 31,57,03,224.69. The Corporate Debtor did not dispute the default amount. The Corporate Debtor provided corporate guarantee against the loan availed by the principal borrower and there is default in the repayment of the said loan amount for which the present Corporate Debtor is equally liable in its capacity as a corporate guarantor. The

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on …

**Ratio:** A corporate guarantee creates a legally binding obligation on the guarantor to fulfill

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**Reasoning:** The Corporate Debtor provided a corporate guarantee for the loans availed by M/s. Super

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**Interpretation:** A corporate guarantee is interpreted as a contractual obligation where the

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**Application:** Since the principal borrower, M/s. Super Agri Seeds Pvt Ltd, defaulted on the

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## Parties

- **Judges:** K. Anantha…
- **Appellants:** State Bank of…
- **Respondents:** Eterna Life…

## Timeline

- **2005-03-05 — Sanction Lett…**: Date of sanction letter for…
- **2015-03-05 — Corporate Guarantee…**: Corporate Guarantee executed…

## 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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