# In the matter of FIvebro International Private Limited Company Application No. CP (IB) 570-NCLT-AHM-2018

> NCLT judgment dated 2022-05-10. Citation: TCN-2022-NCLT-02791. This case involves an application filed by IDBI Bank Limited under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 10 May 2022
- **Citation:** TCN-2022-NCLT-02791
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/fivebro-international-private-limited-company-application-no-cp-ib-570-nclt-ahm-6a66feaa

## Summary

### Background

This case involves an application filed by IDBI Bank Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Fivebro International Private Limited, the corporate guarantor, for securing financial assistance granted to M/s. Doshion Water Solution Private Limited (the borrower) under Bank of Baroda Consortium finance. The borrower failed to repay the overall credit facility, leading to the loan account being classified as NPA. The applicant issued a recall notice and invoked the corporate guarantee. The corporate debtor raised objections, including the validity of the guarantee and limitation. The applicant rebutted these contentions, asserting the corporate guarantee's validity and the application's timeliness.

## Facts

IDBI Bank Limited (the applicant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Fivebro International Private Limited (the corporate debtor), seeking to initiate Corporate Insolvency Resolution Process (CIRP). The application is based on the corporate guarantee provided by Fivebro International for the financial assistance extended to M/s. Doshion Water Solution Private Limited (the borrower) under a Bank of Baroda Consortium finance arrangement. A loan of Rs. 72 crores was sanctioned to the borrower on 27.02.2009, with subsequent modifications. The borrower executed loan/facility agreements, promissory notes, and omnibus counter guarantees. The financial assistance was restructured with an enhanced credit limit of Rs. 110.26

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## Issues and analysis

### Issue 1: Whether the application filed by IDBI Bank Limited under Section 7 of the Insolvency and Bankruptcy …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The corporate debtor provided a corporate guarantee for the financial assistance 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 NCLT found that Fivebro International Private Limited had provided a

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## Parties

- **Judges:** DEEPTI M…; Ajai Das Me…
- **Appellants:** IDBI Bank L…
- **Respondents:** Fivebro Internatio…

## Timeline

- **2009-02-27 — Loan San…**: Loan of Rs. 72 crores sanctioned to M/s.…
- **2014-06-27 — Corporate Gu…**: Fivebro International Private…

## 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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