# In the matter of Vidarbha Iron and Steel Corporation Limited CP 1660-I&BC-NCLT-MB-MAH-2017

> NCLT judgment dated 2018-03-12. Citation: TCN-2018-NCLT-01725. The case involves a petition filed by M/S. Vidarbha Iron and Steel Corporation Limited, the…

- **Court:** NCLT
- **Order date:** 12 Mar 2018
- **Citation:** TCN-2018-NCLT-01725
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vidarbha-iron-and-steel-corporation-limited-cp-1660-ibc-nclt-mb-mah-2017-616e67e8

## Summary

### Background

The case involves a petition filed by M/S. Vidarbha Iron and Steel Corporation Limited, the Corporate Debtor, under Section 10 of the Insolvency & Bankruptcy Code 2016, seeking to declare itself insolvent. The Corporate Debtor is also a guarantor for loans provided to its sister concern, Facor Steel Limited. The application is based on a default in payment as a Guarantor to the banks as Financial Creditor of M/s. Facor Steels Limited viz. Bank of India and Indian Overseas Bank. The Corporate Debtor had filed the Petition on Form 6 on 2017-11-27.

## Facts

M/S. Vidarbha Iron and Steel Corporation Limited, the Corporate Debtor, filed a petition under Section 10 of the Insolvency & Bankruptcy Code 2016 to declare itself insolvent. The company was incorporated in 1972 to manufacture Basic Iron & Steel. The Corporate Debtor is a 'Corporate Guarantor' to loans provided to Facor Steel Limited. The application is based on a default in payment as a Guarantor to the banks as Financial Creditor of M/s. Facor Steels Limited viz. Bank of India and Indian Overseas Bank. The Corporate Debtor has filed this Application based on a default in payment as a Guarantor to the banks as Financial Creditor of M/s. Facor Steels Limited viz. Bank of India and Indian Overseas Bank. Also Guarantor of Operational Creditor M/s. Ind Inv Trust

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## Issues and analysis

### Issue 1: Whether the Petitioner, being a 'Guarantor', can be proceeded against under Section 10 of the …

**Ratio:** A 'claim' against a Guarantor is an enforceable legal right. The definition of 'Debt'

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**Reasoning:** The court reasoned that the definition of 'Claim' and 'Debt' under the I&B Code

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**Interpretation:** The court interpreted the provisions of the I&B Code to include the

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**Application:** The court applied this interpretation to the facts of the case, finding that

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## Parties

- **Judges:** M.K. Sh…; Bhaskara Pantula…
- **Respondents:** M/S. Vidarbha…

## Timeline

- **1972-11-22 — Company Incor…**: M/s Vidarbha Iron and Steel Corporation Limited was incorporated with the object to…
- **2014-03-04 — Agreement…**: Agreement executed between Maharashtra Industrial and Development Corporation (MIDC) as a…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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