# In the matter of Deserve Exim Private Limited I.A. No. 609 of 2022 in CP (IB) No. 1191-(MB)-2021

> NCLT judgment dated 2023-02-10. Citation: TCN-2023-NCLT-04622. The case involves an application filed by Deserve Exim Private Limited, the Corporate Debtor,…

- **Court:** NCLT
- **Order date:** 10 Feb 2023
- **Citation:** TCN-2023-NCLT-04622
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/deserve-exim-private-limited-ia-no-609-of-2022-in-cp-ib-no-1191-mb-2021-22cc293e

## Summary

### Background

The case involves an application filed by Deserve Exim Private Limited, the Corporate Debtor, seeking the dismissal of a Company Petition (C.P. No. 1191 of 2021) filed against them under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor argues that the petition is barred under Section 10A of the Code, which prohibits the initiation of CIRP for defaults occurring during a specific period related to the COVID-19 pandemic. The Financial Creditor, YES Bank Limited, filed the petition due to defaults in repayment of loans advanced to Radius & Deserve Builders LLP and Raghuleela Builders Pvt Ltd, for which Deserve Exim Private Limited acted as a guarantor.

## Facts

The Financial Creditor, YES Bank Limited, advanced term loans to Radius & Deserve Builders LLP and Raghuleela Builders Pvt Ltd, collectively known as the Original Borrowers, amounting to Rs. 800,00,00,000/-. Deserve Exim Private Limited acted as a guarantor for these loans, executing two Deeds of Guarantee dated June 2, 2015. The Original Borrowers defaulted on repayments on August 1, 2019, and February 1, 2019, respectively. The Financial Creditor declared the accounts as Non-Performing Assets (NPA) on October 31, 2019, and May 2, 2019, respectively. The Financial Creditor invoked the guarantees on August 7, 2020, and June 26, 2020. The Financial Creditor then filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Deserve Exim

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## Issues and analysis

### Issue 1: Whether the Company Petition filed by the Financial Creditor is barred under Section 10A of the …

**Ratio:** Section 10A of the Insolvency and Bankruptcy Code, 2016, prohibits the initiation of

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**Reasoning:** The court reasoned that the default by the Corporate Debtor, as a guarantor, should be

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**Interpretation:** Section 10A provides a temporary suspension of CIRP initiation for defaults

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**Application:** The court applied Section 10A to the facts of the case, considering the dates

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Respondents:** Deserve Exim…; Yes Bank L…

## Timeline

- **2015-06-02 — Execution of Deeds of…**: Deserve Exim Private Limited executed two Deeds of Guarantee guaranteeing the repayment…
- **2019-02-01 — Default by Bo…**: Raghuleela Builders Pvt Ltd…

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