# In the matter of Future Corporate Resources Private Limited

> NCLT judgment dated 2024-09-24. Citation: TCN-2024-NCLT-00556. The case involves an application filed by Central Bank of India (Financial Creditor) under…

- **Court:** NCLT
- **Order date:** 24 Sept 2024
- **Citation:** TCN-2024-NCLT-00556
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/future-corporate-resources-private-limited-580949c9

## Summary

### Background

The case involves an application filed by Central Bank of India (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Future Corporate Resources Private Limited (Corporate Debtor). The Corporate Debtor acted as a guarantor for a term loan of Rs. 150 crores sanctioned by the Financial Creditor to Iskrupa Mall Management Company Private Limited (Principal Borrower). After the Principal Borrower defaulted, the Financial Creditor issued a demand notice and subsequently filed the application for CIRP.

## Facts

Central Bank of India (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Future Corporate Resources Private Limited (Corporate Debtor). The Corporate Debtor acted as a corporate guarantor for a term loan of Rs. 150 crores sanctioned by the Financial Creditor to Iskrupa Mall Management Company Private Limited (Principal Borrower). A Term Loan Agreement was executed on 24.09.2015. The loan was guaranteed by the Corporate Debtor through a Deed of Guarantee executed on the same date. The Principal Borrower defaulted on 30.09.2020 and requested a One-Time Restructuring (OTR) under the 'Resolution Framework for Covid-19 Related Stress'. An OTR was executed

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC is maintainable against the Corporate Debtor, …

**Ratio:** A corporate guarantor is liable for the debt of the principal borrower, and proceedings

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**Reasoning:** The NCLT considered the pleadings and materials on record and determined that the

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**Interpretation:** The IBC allows for the initiation of CIRP against a corporate guarantor when

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**Application:** The Corporate Debtor acted as a guarantor for the Principal Borrower's loan.

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Respondents:** Future Corporate…

## Timeline

- **2015-09-24 — Term Loan Ag…**: The Financial Creditor entered into a Term…
- **2020-09-30 — Default by Principal…**: The Principal Borrower…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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