# In the matter of Swati Udyog Private Limited I.A. (IB) No. 616-KB-2021 in C.P. (IB) No. 956-KB-2018

> NCLT judgment dated 2021-08-12. Citation: TCN-2021-NCLT-01357. This case involves an application (I.A. (IB) No. 616/KB/2021) filed in an ongoing corporate…

- **Court:** NCLT
- **Order date:** 12 Aug 2021
- **Citation:** TCN-2021-NCLT-01357
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/swati-udyog-private-limited-ia-ib-no-616-kb-2021-in-cp-ib-no-956-kb-2018-60aa039f

## Summary

### Background

This case involves an application (I.A. (IB) No. 616/KB/2021) filed in an ongoing corporate insolvency resolution process (CIRP) under C.P. (IB) No. 956/KB/2018. The application was filed by the Resolution Professional (RP) of Swati Udyog Private Limited, seeking clarification or modification of a previous order dated 2021-06-16, specifically regarding the release of a corporate guarantee provided by Vaishnavi Metal and Power Private Limited. Vaishnavi Metal is a wholly-owned subsidiary of the Corporate Debtor, Swati Udyog. The RP argued that the release of this guarantee is crucial for the successful implementation of the resolution plan. The application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.

## Facts

Swati Udyog Private Limited is undergoing CIRP. Vaishnavi Metal and Power Private Limited, a wholly-owned subsidiary of Swati Udyog, provided a corporate guarantee to the Financial Creditors (State Bank of India and Punjab National Bank) of Swati Udyog, securing debts. This guarantee was provided via a deed of guarantee dated 2015-04-02, after a debt restructuring. Vaishnavi Metal owns a property of approximately 30.27 acres in Jharkhand, leased to Swati Udyog for 41 years from 2010-02-01. A significant portion of Swati Udyog's cement plant is located on this leased land. The Resolution Applicant requested the release of the corporate guarantee as part of the Resolution Plan. The CoC initially communicated that certain guarantees, including personal guarantees and

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## Issues and analysis

### Issue 1: Whether the Resolution Professional has the locus standi to seek the discharge of a corporate …

**Ratio:** The Resolution Applicant has the locus standi to maintain the application because the

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**Reasoning:** The court reasoned that the Resolution Plan, which includes the release of the corporate

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**Interpretation:** This clarifies that the Resolution Professional, as the entity responsible for

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**Application:** Since the release of the corporate guarantee was contemplated in the Resolution

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** MANISH…
- **Respondents:** Swati Udyog…; State Bank of…

## Timeline

- **2010-02-01 — Lease De…**: Vaishnavi Metal and Power Private Limited leased property to Swati Udyog Private Limited…
- **2015-04-02 — Corporate Gu…**: Vaishnavi Metal and Power Private Limited gave a corporate guarantee to the Financial…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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