# 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-04630. 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-04630
- **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-2021-99b38e7f

## Summary

### Background

The case involves an application filed by Deserve Exim Private Limited, the Corporate Debtor, seeking the dismissal of a petition filed by YES Bank Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to a default in repayment of an aggregate amount of Rs. 888,94,94,865/-. The Corporate Debtor argued that the petition is barred under Section 10A of the Code, as the default occurred during the period when Section 10A was in effect, which prohibits the initiation of CIRP for defaults occurring between March 25, 2020, and March 24, 2021.

## Facts

The Financial Creditor, YES Bank Limited, advanced Term Loans to Radius & Deserve Builders LLP and Raghuleela Builders Pvt Ltd, collectively called the Original Borrowers, for a combined amount of Rs. 800,00,00,000/-. The Corporate Debtor, Deserve Exim Private Limited, executed two Deeds of Guarantee dated June 2, 2015, guaranteeing the repayment of the loans. The Original Borrowers defaulted in making repayments on August 1, 2019, and February 1, 2019, respectively. The Financial Creditor declared their accounts as Non-Performing Asset (NPA) on October 31, 2019, and May 2, 2019, respectively. The Financial Creditor invoked the Guarantee of the Corporate Debtor on August 7, 2020, and June 26, 2020. The Financial Creditor filed a Petition under Section 7 of the

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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 date of default in respect of the Corporate Guarantor should

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

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

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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…**: The Corporate Debtor executed two Deeds of Guarantee guaranteeing the repayment of loans…
- **2019-02-01 — Default by Bo…**: Borrower 2 committed…

## 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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