# In the matter of Gupta Infrastructure (India) Pvt. Ltd. C.P. No. 1397 & C.P. No. 1398-I&BP-2017

> NCLT judgment dated 2018-02-01. Citation: TCN-2018-NCLT-01884. Bank of India filed two company petitions (CP 1397/2017 and CP 1398/2017) under Section 7 of…

- **Court:** NCLT
- **Order date:** 1 Feb 2018
- **Citation:** TCN-2018-NCLT-01884
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gupta-infrastructure-india-pvt-ltd-cp-no-1397-cp-no-1398-ibp-2017-a10b23f6

## Summary

### Background

Bank of India filed two company petitions (CP 1397/2017 and CP 1398/2017) under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 against Gupta Infrastructure (India) Pvt Ltd. and Gupta Infratec Pvt. Ltd., respectively. The petitions were based on the fact that these two companies, along with Gupta Corporation Pvt Ltd and Gupta Global Resources Pvt Ltd, had executed a Deed of Guarantee on 12.7.2014, standing as guarantors for the working capital facility availed by Gupta Coal India Pvt. Ltd. When Gupta Coal India Pvt Ltd defaulted on the loan, Bank of India, the financial creditor, issued notices to the guarantors. As there was no response, the bank filed these petitions for initiating the Corporate Insolvency Resolution Process (CIRP). The principal borrower

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## Facts

Bank of India, a financial creditor, filed two separate company petitions (CP 1397/2017 and CP 1398/2017) against Gupta Infrastructure (India) Pvt. Ltd. and Gupta Infratec Pvt. Ltd. respectively, under Section 7 of the Insolvency and Bankruptcy Code, 2016. These petitions were based on the same set of facts. The corporate debtor companies, along with Gupta Corporation Pvt Ltd and Gupta Global Resources Pvt Ltd, had executed a Deed of Guarantee on 12.7.2014, acting as guarantors for the working capital facility availed by Gupta Coal India Pvt. Ltd. Gupta Coal India Pvt Ltd defaulted in repaying the loan. Bank of India issued notices to the guarantors to pay off the liability. The principal borrower had availed a total financial assistance of ₹906 crores, which was later

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## Issues and analysis

### Issue 1: Whether the deed of guarantee executed by the guarantors is duly stamped, and whether this company …

**Ratio:** The validity of a contract is dependent upon the consideration passed against each other.

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**Reasoning:** The NCLT reasoned that the deed of guarantee cannot be treated as a standalone instrument

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**Interpretation:** The NCLT interpreted that the deed of guarantee is to be read along with the

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**Application:** The NCLT applied the principle that since the corporate debtors have not denied

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## Parties

- **Judges:** B.S.V. Prakash…; V. Nallasen…
- **Appellants:** Bank of…
- **Respondents:** Gupta Infrastructu…

## Timeline

- **2014-07-12 — Deed of Guarantee…**: Gupta Infrastructure (India) Pvt Ltd, Gupta Infratec Pvt. Ltd., Gupta Corporation Pvt Ltd…
- **2014-06-27 — Supplemental Working Capital Consortium…**: A Supplemental Working Capital Consortium Agreement was executed by the principal…

## 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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