# In the matter of Manogayan Estates Pvt. Ltd.  C.P. No. IB-172(PB)-2019

> NCLT judgment dated 2019-03-07. Citation: TCN-2019-NCLT-04544. The case pertains to a corporate guarantee for securing a loan disbursed to Adel Landmarks…

- **Court:** NCLT
- **Order date:** 7 Mar 2019
- **Citation:** TCN-2019-NCLT-04544
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/manogayan-estates-pvt-ltd-cp-no-ib-172pb-2019-d94cf65e

## Summary

### Background

The case pertains to a corporate guarantee for securing a loan disbursed to Adel Landmarks Limited, referred to as 'Principal Borrower'. Edelweiss Asset Reconstruction Company Limited, the Petitioner, filed a petition against Manogayan Estates Pvt Ltd, the Respondent and Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. Adel Landmarks Limited had availed a term loan of Rs. 170 Crores from ECL Finance Limited. The Corporate Debtor guaranteed the repayment of this credit facility. ECL Finance Limited assigned the debt to Edelweiss Asset Reconstruction Company Ltd. The loan sanctioned to Adel Landmarks Limited was recalled, and the Corporate Guarantee was invoked.

## Facts

Adel Landmarks Limited (formerly known as Era Landmarks Limited) availed a term loan of Rs. 170 Crores from ECL Finance Limited. Manogayan Estates Pvt Ltd (the Respondent) provided a corporate guarantee for the repayment of this loan. ECL Finance Limited assigned the debt to Edelweiss Asset Reconstruction Company Ltd (the Petitioner). The loan to Adel Landmarks Limited was recalled, and the corporate guarantee was invoked. The Petitioner filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against the Respondent, Manogayan Estates Pvt Ltd, due to default on the guaranteed loan. A petition for initiation of corporate insolvency resolution process against Adel Landmarks Limited had already been admitted. The total amount in default as of

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## Issues and analysis

### Issue 1: Whether a second application under Section 7 of the Insolvency and Bankruptcy Code, 2016, by the …

**Ratio:** Once a Section 7 application filed by the financial creditor is admitted against one of

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**Reasoning:** The court relied on the judgment in Dr. Vishnu Kumar Agarwal Vs. M/s. Piramal Enterprises

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**Interpretation:** The interpretation is that the Insolvency and Bankruptcy Code does not allow

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**Application:** Since a petition had already been admitted against the principal borrower, Adel

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## Parties

- **Judges:** M. M. K…; DEEPTI M…
- **Appellants:** Edelweiss Asset…
- **Respondents:** Manogayan Estates…
- **Advocates:** Atul Sh…; Shashank…; +3 more

## Timeline

- **2017-03-23 — Assignment Ag…**: ECL Finance Limited assigned the debt to…
- **2018-07-02 — Loan Recall…**: The loan sanctioned to Adel…

## 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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