# In the matter of Abhisar Impex Pvt. Ltd. C.P. (IB)-91(PB)-2022

> NCLT judgment dated 2022-03-29. Citation: TCN-2022-NCLT-03483. DBS Bank India Limited (DBIL), the Financial Creditor, filed an application seeking initiation…

- **Court:** NCLT
- **Order date:** 29 Mar 2022
- **Citation:** TCN-2022-NCLT-03483
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/abhisar-impex-pvt-ltd-cp-ib-91pb-2022-ef51cfcf

## Summary

### Background

DBS Bank India Limited (DBIL), the Financial Creditor, filed an application seeking initiation of corporate insolvency resolution process against M/s. Abhisar Impex Private Limited (Corporate Debtor), who is a Corporate Guarantor. The Corporate Debtor had provided a corporate guarantee for Rs. 25 Crore in favor of M/s Vayam Technologies Limited, the principal borrower, which had availed working capital credit facilities of Rs. 25 Crore sanctioned on 01.08.2011 and renewed thereafter. The working capital facility was secured by the corporate guarantee dated 14.03.2012 extended by M/s. Abhisar Impex Private Limited and by creation of charge by way of equitable mortgage. The principal borrower defaulted, and the Corporate Guarantor also failed to honor its obligations.

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## Facts

DBS Bank India Limited (DBIL) extended financial facilities to M/s Vayam Technologies Limited, the principal borrower, which were secured by a corporate guarantee from M/s. Abhisar Impex Private Limited (Corporate Debtor). The working capital credit facilities of Rs. 25 Crore were sanctioned on 01.08.2011 and renewed thereafter on 13.09.2012 and 22.11.2013. The corporate guarantee was dated 14.03.2012. The principal borrower defaulted on its obligations, leading the Financial Creditor to issue a loan recall notice dated 20.06.2015 to both the borrower and the Corporate Guarantor. The Financial Creditor was awarded Rs. 23,29,19,212.46/-. The Financial Creditor invoked the corporate guarantee on 29.10.2021. The Corporate Guarantor did not reply to the notice of

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC for initiating CIRP is maintainable against the …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The Corporate Debtor provided a corporate guarantee for the financial facilities extended

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** The Corporate Debtor provided a corporate guarantee, and the principal borrower

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** DBS Bank India…
- **Respondents:** M/s. Abhisar…

## Timeline

- **2011-08-01 — Sanction of Working…**: Working capital credit facilities of Rs. 25 Crore sanctioned to M/s Vayam Technologies…
- **2012-03-14 — Corporate Gu…**: Corporate guarantee dated 14.03.2012 extended…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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