# In the matter of GKC Projects Limited CP(IB)No. 461-7-HDB-23019

> NCLT judgment dated 2019-11-21. Citation: TCN-2019-NCLT-00500. The case involves a petition filed by State Bank of India, Muscat, as the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 21 Nov 2019
- **Citation:** TCN-2019-NCLT-00500
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gkc-projects-limited-cpibno-461-7-hdb-23019-45b8dc7e

## Summary

### Background

The case involves a petition filed by State Bank of India, Muscat, as the Financial Creditor, against GKC Projects Limited, the Corporate Debtor/Corporate Guarantor. The Financial Creditor claims that the Corporate Debtor defaulted on repaying a sum of Rs.7,54,87,767 as of 30.04.2019. The date of default is stated to be 31.01.2019. The petition is filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking admission of the petition and initiation of Corporate Insolvency Resolution Process against the Corporate Guarantor.

## Facts

State Bank of India (Muscat Branch, Oman) filed a petition as the Financial Creditor against GKC Projects Limited, the Corporate Debtor/Corporate Guarantor, claiming a default of Rs.7,54,87,767 as of 30.04.2019, with the default date stated as 31.01.2019. GKC Projects LLC had availed a loan of Rs.9,05,00,000 as on 30.04.2018. The Financial Creditor issued a legal notice on 25.02.2019 to the Corporate Guarantor to repay the overdue amount. The Financial Creditor also filed a copy of the Statement of Account. The Financial Creditor recommended Sri. G. Madhusudhan Rao as the proposed IRP. The Corporate Debtor/Corporate Guarantor did not object to the petition. The Financial Creditor provided documents, including a Joint Venture Agreement dated 21.09.2012, letters,

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## Issues and analysis

### Issue 1: Whether the Financial Creditor is entitled to proceed against the Corporate Guarantor for the …

**Ratio:** The liability of the Principal Borrower and the Corporate Guarantor are joint and

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**Reasoning:** The Counsel for the Financial Creditor contended that the Financial Creditor is entitled

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**Interpretation:** This issue concerns the legal principle of guarantee and the rights of a

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**Application:** The court applied the principle that a financial creditor can proceed against a

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## Parties

- **Judges:** Ratakonda…; Narender Kumar…; +1 more
- **Appellants:** State Bank Of…
- **Respondents:** GKC PROJECTS…

## Timeline

- **2019-01-31 — Date of D…**: The date of default is…
- **2019-02-25 — Legal Notice…**: Financial Creditor issued legal notice dated 25.02.2019 to the Corporate Guarantor to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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