# In the matter of Supreme Finefab Pvt. Ltd. C.P. (I.B) No. 132-7-NCLT-AHM-2019

> NCLT judgment dated 2021-03-16. Citation: TCN-2021-NCLT-02681. Dena Bank (now Bank of Baroda) filed two applications under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 16 Mar 2021
- **Citation:** TCN-2021-NCLT-02681
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/supreme-finefab-pvt-ltd-cp-ib-no-132-7-nclt-ahm-2019-64af6132

## Summary

### Background

Dena Bank (now Bank of Baroda) filed two applications under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against two corporate guarantors, M/s. Utility Agrotech Industries Pvt. Ltd. and M/s. Supreme Fine Fab Pvt. Ltd., for the same principal borrower, M/s. Supreme (India) Impex Limited. CP(IB) 131 of 2019 was filed against M/s. Utility Agrotech Industries Pvt. Ltd., and CP(IB) 132 of 2019 was filed against M/s. Supreme Fine Fab Pvt. Ltd. Both corporate guarantors allegedly defaulted in paying the financial debt. The date of default for CP(IB) 131 is stated as 2018-06-13, with a debt of Rs. 55,38,117/-, and for CP(IB) 132, the debt is Rs. 58,75,000/-. The applications sought to initiate Corporate Insolvency Resolution Process (CIRP) against the corporate

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## Facts

Dena Bank (now Bank of Baroda) filed applications CP(IB) 131 of 2019 and CP(IB) 132 of 2019 under Section 7 of the IBC, 2016, against M/s. Utility Agrotech Industries Pvt. Ltd. and M/s. Supreme Fine Fab Pvt. Ltd., respectively. Both companies acted as corporate guarantors for the same principal borrower, M/s. Supreme (India) Impex Limited. M/s. Utility Agrotech Industries Pvt. Ltd. and M/s. Supreme (India) Impex Limited executed a deed of guarantee on 2018-01-02. The principal borrower defaulted in paying the loan amount, leading the Financial Creditor to invoke the guarantees via a letter dated 2019-01-17. The corporate guarantors failed to comply with the demand. The date of default for CP(IB) 131 is stated as 2018-06-13, with a debt of Rs. 55,38,117/-, and for

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## Issues and analysis

### Issue 1: Whether the bank declared the principal borrower's loan account to be NPA illegally and ignoring …

**Ratio:** The Adjudicating Authority found no substance in this defense. The fact admitted on

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**Reasoning:** The Adjudicating Authority stated that the principal borrower's failure to pay the loan

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**Interpretation:** The interpretation is that if the principal borrower defaults on the loan, the

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**Application:** The principal borrower defaulted on the loan, and the bank rightly invoked the

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Bank of B…
- **Respondents:** Supreme Finefab…; Utility Agrotech…

## Timeline

- **2018-01-02 — Deed of Guarantee…**: Supreme (India) Impex Limited and M/s. Utility Agrotech Industries Pvt. Ltd. executed a…
- **2018-06-13 — Date of Default (CP(IB)…**: The date of default for CP(IB) 131…

## 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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