# In the matter of Pinky Shipyard Private Limited CP No. 1634-IBC-NCLT-MB-MAH-2017

> NCLT judgment dated 2018-07-31. Citation: TCN-2018-NCLT-01040. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 31 Jul 2018
- **Citation:** TCN-2018-NCLT-01040
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/pinky-shipyard-private-limited-cp-no-1634-ibc-nclt-mb-mah-2017-17acb687

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by Edelweiss Asset Reconstruction Company Limited (Financial Creditor) against Pinky Shipyard Private Limited (Corporate Debtor), acting as a corporate guarantor for loans availed by Bharati Defence and Infrastructure Limited (Principal Borrower). The Principal Borrower defaulted on its loan repayments, leading to the initiation of CIRP against it. Subsequently, the Financial Creditor filed this application against the Corporate Debtor due to its failure to fulfill its obligations as a guarantor.

## Facts

M/s. Edelweiss Asset Reconstruction Company Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Pinky Shipyard Private Limited (Corporate Debtor). Pinky Shipyard acted as a Corporate Guarantor for loans availed by M/s. Bharati Defence and Infrastructure Limited (Principal Borrower). The Principal Borrower defaulted on loan repayments, leading to CIRP initiation against it. IDBI Bank Limited had assigned its debts to Edelweiss Asset Reconstruction Company Limited. The total debt granted was ₹325,60,59,824/-, with a default amount of ₹654,69,16,947/-. The Corporate Debtor furnished a 'Deed of Guarantee' on 26.02.2013. The Financial Creditor invoked the Corporate Guarantee via a letter dated

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## Issues and analysis

### Issue 1: Whether the Insolvency Application can be Admitted against the Corporate Guarantor where the CIRP …

**Ratio:** The ratio is based on the interpretation of the Insolvency and Bankruptcy Code, 2016, and

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**Reasoning:** The Tribunal reasoned that the moratorium under Section 14 applies only to proceedings

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**Interpretation:** The interpretation involves understanding that the liability of a guarantor is

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**Application:** The Tribunal applied the ratio and reasoning to the specific facts of the case,

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## Parties

- **Judges:** M.K. Sh…; Bhaskara Pantula…
- **Appellants:** M/s. Edelweiss…
- **Respondents:** M/s. Pinky…

## Timeline

- **2016-01-01 — Enactment of Insolvency…**: The Insolvency and Bankruptcy…
- **2016-03-30 — Assignment Ag…**: IDBI Bank Limited assigned all its debts to M/s. Edelweiss Asset Reconstruction Company…

## 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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