# In the matter of Sujyot Infrastructure Pvt. Ltd. CP (IB) 559 of 2019

> NCLT judgment dated 2021-12-22. Citation: TCN-2021-NCLT-00075. The State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 22 Dec 2021
- **Citation:** TCN-2021-NCLT-00075
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sujyot-infrastructure-pvt-ltd-cp-ib-559-of-2019-a4fe0b80

## Summary

### Background

The State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Sujyot Infrastructure Pvt. Ltd. The application was based on a default amount of Rs. 839,37,50,003.78/- and interest thereon, with the date of default stated as 26.03.2019. The applicant claimed that the respondent, Sujyot Infrastructure Pvt. Ltd., is liable as a guarantor for credit facilities provided to Sai Info Systems (India). The corporate debtor opposed the application, arguing that it was filed mala fidely, in breach of RBI guidelines, and without joining necessary parties. They also claimed that no amount was due and the application was barred by limitation.

## Facts

State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Sujyot Infrastructure Pvt. Ltd. SBI claimed Sujyot Infrastructure was a corporate guarantor for Sai Info Systems (India), which defaulted on its debt obligations. The default amount was Rs. 839.37 crore as of March 26, 2019, with an interest rate of 12.25%. SBI argued that despite repeated reminders, Sujyot Infrastructure failed to pay the dues. Sujyot Infrastructure opposed the application, claiming it was filed mala fidely, violated RBI guidelines, and was barred by limitation. They also argued that an insolvency petition against the main borrower, Sai Info Systems, was already filed in 2017. SBI

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC is maintainable against the Corporate Debtor, …

**Ratio:** The liability of a corporate guarantor is co-extensive with that of the principal

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**Reasoning:** The court relied on the principle that a corporate guarantor's liability is co-extensive

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**Interpretation:** This means that if the principal borrower defaults, the financial creditor can

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**Application:** In this case, Sujyot Infrastructure Pvt. Ltd. acted as a corporate guarantor

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## Parties

- **Judges:** Madan B.…; Ajai Das Me…
- **Appellants:** State Bank of…
- **Respondents:** Sujyot Infrastruct…

## Timeline

- **2019-03-26 — Date of D…**: The date of default as stated by the…
- **2018-03-13 — Issuance of Recovery…**: Debt Recovery Tribunal issued a recovery…

## 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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