# In the matter of Surana Power Ltd. MA Nos. 372 & 375-2018 in CP No. 646-IB-CB-2017

> NCLT judgment dated 2018-10-30. Citation: TCN-2018-NCLT-00442. The case involves separate and independent Miscellaneous Applications filed by L&T…

- **Court:** NCLT
- **Order date:** 30 Oct 2018
- **Citation:** TCN-2018-NCLT-00442
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/surana-power-ltd-ma-nos-372-375-2018-in-cp-no-646-ib-cb-2017-9e614582

## Summary

### Background

The case involves separate and independent Miscellaneous Applications filed by L&T Infrastructure Finance Company Limited against several respondents who stood as personal guarantors to the loan availed by the corporate debtor, Surana Power Limited. The applicant sought initiation of Corporate Insolvency Resolution Process (CIRP) against these personal guarantors under Section 60(2) and 60(5) of the Insolvency & Bankruptcy Code (IBC). The Corporate Debtor had availed a loan facility of ₹1800 crores from a consortium of lenders, including the applicant, and defaulted on repayment, leading to the invocation of guarantees by the applicant.

## Facts

M/s. Surana Power Limited (Corporate Debtor) availed a loan facility of ₹1800 crores from a consortium of lenders, including L&T Infrastructure Finance Company Limited (Financial Creditor). The loan agreement was executed on 2010-09-24. The Corporate Debtor was required to provide an irrevocable and unconditional personal guarantee in favor of the Security Trustee. The respondents acted as personal guarantors by executing a deed of guarantee on 2010-09-24. The Corporate Debtor defaulted on repaying the loan. The Financial Creditor recalled the facility on 2015-08-07 and invoked the guarantee, demanding ₹94,03,96,178 as on 2016-03-31. The guarantors failed to make the payment. The Financial Creditor filed OA 122/2017 before the Debt Recovery Tribunal-II (DRT)

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## Issues and analysis

### Issue 1: Whether the NCLT has the jurisdiction to initiate Corporate Insolvency Resolution Process (CIRP) …

**Ratio:** The jurisdiction of the NCLT to deal with proceedings against personal guarantors is

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**Reasoning:** The NCLT reasoned that since Part-III of the IBC has not been notified and the DRT has

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**Interpretation:** Section 60(2) of the IBC allows for applications relating to the bankruptcy of

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**Application:** In this case, since Part-III of the IBC has not been notified, the NCLT lacks

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** M/s. L & T…
- **Respondents:** M/s. SURANA POWER…; Mr.Dineshchand…

## Timeline

- **2010-09-24 — Loan Agre…**: Corporate Debtor availed loan facility of…
- **2010-09-24 — Deed of Gua…**: Respondents executed a deed of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(2) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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