# In the matter of CANDID INDUSTRIES LIMITED

> NCLT judgment dated 2026-04-02. Citation: TCN-2026-NCLT-00282. Central Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 2 Apr 2026
- **Citation:** TCN-2026-NCLT-00282
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chennai/candid-industries-limited-5c7cba22

## Summary

### Background

Central Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Candid Industries Limited, the Corporate Guarantor.

## Facts

Central Bank of India filed CP(IB)/109(CHE)/2025 under Section 7 of the IBC, 2016, against Candid Industries Limited.

Candid Industries Limited acted as a guarantor for Best & Crompton Engineering Projects Limited.

The petitioner sanctioned working capital limits to the Principal Debtor for Rs. 120 crores on 30.11.2010.

The amount in default as per Demand Notice issued by DRT on 14.08.2018 was Rs.507,22,85,234.93.

The Principal Debtor acknowledged the default in its balance sheet for the financial year 2021-2022.

CIRP was already initiated against the Corporate Debtor Best & Crompton Engineering Projects Limited in CP/183/2024 vide order dated 04.04.2025.

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## Issues and analysis

### Issue 1: Whether the liability of the guarantor is co-extensive with that of the principal borrower under …

**Ratio:** As per Section 128 of the Contract Act 1872, the liability of guarantor is co existing

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**Reasoning:** The tribunal relied on Section 128 of the Contract Act, stating that the liability of the

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**Interpretation:** The guarantor's liability arises simultaneously with the principal debtor's

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**Application:** The tribunal applied this principle to the case, holding that Candid Industries

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** Central Bank of…
- **Respondents:** Candid Industries…; M/s. Candid…
- **Other parties:** V. Dura…
- **Advocates:** Clara Heps…; Ashlin Ch…

## Timeline

- **2010-11-30 — Sanction of Working…**: Petitioner sanctioned various working capital limits to the Principal Debtor for Rs. 120…
- **2018-05-18 — DRT Orde…**: Debt Recovery Tribunal passed final order in OA 457/2014 allowing the OA and issued a…

## 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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