# In the matter of Guruashish Constructions Private Limited

> NCLT judgment dated 2023-08-11. Citation: TCN-2023-NCLT-02030. The case involves an application by IL&FS Financial Services Limited, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 11 Aug 2023
- **Citation:** TCN-2023-NCLT-02030
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/guruashish-constructions-private-limited-16fb3c9e

## Summary

### Background

The case involves an application by IL&FS Financial Services Limited, the Financial Creditor, against Rajendra K. Bhuta, the Liquidator of Guruashish Constructions Private Limited, the Corporate Debtor. The Financial Creditor sought the Tribunal's intervention to set aside the Liquidator's decision dated 18.11.2020, which partially rejected their claim. The Corporate Debtor was admitted into CIRP on 24.07.2017, and subsequently liquidated on 04.09.2020. The Liquidator partially rejected a claim of Rs. 3,38,67,858/- out of a total claim of Rs. 10,86,23,598/-, citing that the Applicant was claiming interest on interest already charged over the loan facility. The applicant had entered into a loan agreement dated 17.11.2011 with the Corporate Debtor and granted a loan

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## Facts

IL&FS Financial Services Limited (Applicant) filed a claim against Guruashish Constructions Private Limited (Corporate Debtor), which is under liquidation. The Corporate Debtor was admitted into CIRP on 24.07.2017 and subsequently liquidated on 04.09.2020. The Applicant had extended loans to the Corporate Debtor and its group company, Serveall Construction Private Limited, under loan agreements dated 17.11.2011 and 30.06.2015, respectively. The Corporate Debtor also provided a corporate guarantee and mortgage over its assets to secure the loan granted to Serveall Construction Private Limited. The Applicant filed proof of claims for both loans. The Liquidator partially rejected a portion of the Applicant's claim amounting to Rs. 3,38,67,858/-, specifically the

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## Issues and analysis

### Issue 1: Whether the Liquidator was justified in rejecting the claim for delayed payment interest on the …

**Ratio:** The legal principle is that interest cannot be charged on interest unless there is a

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**Reasoning:** The Tribunal reasoned that the Liquidator had erroneously rejected the claim for delayed

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**Interpretation:** The interpretation of the contractual clauses, specifically clauses 29 and 30

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**Application:** In this specific case, the Tribunal applied the principle of contractual

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## Parties

- **Judges:** H.V. Subb…; Anu Jagmoha…
- **Appellants:** IL & FS Financial…
- **Respondents:** Guruashish…; Rajendra K.…

## Timeline

- **2011-11-17 — Loan Agre…**: Applicant entered into a loan agreement with the…
- **2015-06-30 — Loan Agreement with…**: Applicant entered into a loan agreement with Serveall Construction Private Limited for…

## 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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