# In the matter of Vista Steel Private Limited CP (IB) No. 552-KB-2017

> NCLT judgment dated 2017-12-15. Citation: TCN-2017-NCLT-00046. ICICI Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 15 Dec 2017
- **Citation:** TCN-2017-NCLT-00046
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vista-steel-private-limited-cp-ib-no-552-kb-2017-adb9c226

## Summary

### Background

ICICI Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process against Vista Steel Private Limited, based on its role as a corporate guarantor for credit facilities availed by Palogix Infrastructure Pvt. Ltd. The application was filed due to the default in repayment of dues by the borrower, leading ICICI Bank to invoke the Vista Steel corporate guarantees. The corporate debtor, Vista Steel, objected to the application, arguing that it was not maintainable as it was submitted through a Power of Attorney holder and that insolvency proceedings were already underway against the principal borrower, Palogix Infrastructure Pvt. Ltd., with a moratorium in place.

## Facts

ICICI Bank Limited, the financial creditor, sought to initiate Corporate Insolvency Resolution Process (CIRP) against Vista Steel Private Limited, the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. Vista Steel acted as a corporate guarantor for credit facilities extended to Palogix Infrastructure Pvt. Ltd. by ICICI Bank. Palogix Infrastructure Pvt. Ltd. defaulted on its loan obligations, leading ICICI Bank to invoke the corporate guarantees provided by Vista Steel. The total amount in default was Rs. 354,009,796.06 as of August 31, 2017. ICICI Bank had previously granted credit facilities to Palogix Infrastructure Pvt. Ltd., with disbursement dates annexed as Exhibit D. Vista Steel furnished corporate guarantees on November 16, 2010,

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against the …

**Ratio:** Section 14(1)(b) of the Insolvency and Bankruptcy Code, 2016, imposes a moratorium that

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**Reasoning:** The court reasoned that allowing proceedings against the corporate guarantor while a

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**Interpretation:** Section 14(1)(b) is interpreted to mean that during the moratorium period for

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**Application:** In this case, the court applied the ratio of Section 14(1)(b) to the specific

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## Parties

- **Judges:** V. P. S…; Jinan…
- **Appellants:** ICICI Bank…
- **Respondents:** Vista Steel…

## Timeline

- **2016-05-10 — Loan Recall…**: The Financial Creditor recalled the RTL…
- **2016-10-14 — Invocation of Corporate…**: The financial creditor invoked the Vista Steel Corporate Guarantees vide invocation…

## 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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