# In the matter of Bostin Engineers Pvt. Ltd.

> NCLT judgment dated 2024-04-01. Citation: TCN-2024-NCLT-01908. Indian Bank, acting as the Financial Creditor, filed a Company Petition (IB) No. 198/KB/2023…

- **Court:** NCLT
- **Order date:** 1 Apr 2024
- **Citation:** TCN-2024-NCLT-01908
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bostin-engineers-pvt-ltd-32ede761

## Summary

### Background

Indian Bank, acting as the Financial Creditor, filed a Company Petition (IB) No. 198/KB/2023 under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Bostin Engineers Pvt Ltd., the Corporate Debtor, seeking the commencement of the Corporate Insolvency Resolution Process (CIRP). The claim was for Rs. 45,82,87,707.03/- as of 15.07.2023, with the date of default claimed as 31.08.2021. The Corporate Debtor is a Corporate Guarantor to Power Max (India) Ltd., the Principal Borrower, for credit facilities availed by the Principal Borrower. The Principal Borrower had approached the Financial Creditor for sanction of Ad hoc CC Limit in 2008, which was approved. The credit facility was renewed and enhanced on 10.12.2008. The Principal Borrower was further

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## Facts

Indian Bank (Financial Creditor) filed a petition against M/s. Bostin Engineers Pvt Ltd. (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate CIRP. The total amount claimed to be in default was Rs. 45,82,87,707.03/- as of 15.07.2023, with the date of default being 31.08.2021. The Corporate Debtor acted as a Corporate Guarantor for Power Max (India) Ltd. (Principal Borrower). The Principal Borrower had availed credit facilities from the Financial Creditor, which were sanctioned and renewed over time. The Principal Borrower defaulted on repayments, leading the Financial Creditor to classify the account as NPA on 28.11.2021. CIRP had already been initiated against the Principal Borrower on 01.05.2023. The Financial Creditor

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## Issues and analysis

### Issue 1: Whether the guarantee provided by the …

**Ratio:** The execution of a fresh sanction letter to renew or revive credit facilities availed by

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**Reasoning:** The court relied on the judgment in Lata Construction v. Rameshchandra Ramniklal Shah

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**Interpretation:** The court interpreted that a continuing guarantee remains valid even after the

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**Application:** The court applied the ratio to the facts and found that the deed of guarantee

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## Parties

- **Judges:** BIDISHA BA…; SHRI. D.A…
- **Appellants:** Indian…
- **Respondents:** Bostin Engineers…

## Timeline

- **2008-01-01 — Sanction of Ad hoc CC…**: The Principal Borrower approached the Financial Creditor for sanction of Ad hoc CC Limit…
- **2008-12-10 — Renewal and Enhancement…**: The credit facility was renewed and enhanced…

## 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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