# In the matter of Aranca (Mumbai) Private Limited C.P.(IB)-143(MB)-2021

> NCLT judgment dated 2023-03-09. Citation: TCN-2023-NCLT-04278. The case involves an application filed by Sourya Containers Leasing Company, the Financial…

- **Court:** NCLT
- **Order date:** 9 Mar 2023
- **Citation:** TCN-2023-NCLT-04278
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/aranca-mumbai-private-limited-cpib-143mb-2021-99698012

## Summary

### Background

The case involves an application filed by Sourya Containers Leasing Company, the Financial Creditor, to initiate Corporate Insolvency Resolution Process (CIRP) against Aranca (Mumbai) Private Limited, the Corporate Guarantor/Debtor. The application was filed under Section 7 of the IBC, 2016, based on a default of ₹3,94,99,355/- due and payable as on 24.08.2020. This amount was related to a loan availed by Mehar Miracles Private Limited, the Principal Borrower, on 09.01.2017, for which Aranca (Mumbai) Private Limited had provided a guarantee.

## Facts

Sourya Containers Leasing Company (Financial Creditor) filed an application to initiate CIRP against Aranca (Mumbai) Private Limited (Corporate Guarantor/Debtor) under Section 7 of the IBC, 2016. The claim was based on a default of ₹3,94,99,355/- due as of 24.08.2020. This amount was related to a loan availed by Mehar Miracles Private Limited (Principal Borrower) on 09.01.2017, guaranteed by Aranca. The principal loan amount of ₹1,00,00,000/- fell due on 11.06.2017. The Financial Creditor invoked the guarantee on 25.08.2020, demanding repayment, including commitment charges, interest, and taxes, totaling ₹3,94,99,355/- as of 24.08.2020. The Corporate Guarantor/Debtor failed to make the payment. The court observed that the Financial Creditor invoked the Guarantee on

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## Issues and analysis

### Issue 1: Whether the application to initiate Corporate Insolvency Resolution Process (CIRP) against the …

**Ratio:** Section 10A of the IBC restricts the initiation of CIRP for defaults occurring during a

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**Reasoning:** The court observed that the Financial Creditor invoked the guarantee on 24.08.2020, which

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**Interpretation:** Section 10A is interpreted as a bar to initiating CIRP for defaults occurring

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**Application:** In this case, the invocation of the guarantee occurred on 24.08.2020, falling

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Sourya Containers…
- **Respondents:** Aranca (Mumbai)…; Vikram…

## Timeline

- **2017-01-09 — Loan Avai…**: Mehar Miracles Private Limited…
- **2017-06-11 — Principal L…**: The principal loan amount of…

## 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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