# In the matter of GVK Transportation Private Limited

> NCLT judgment dated 2024-08-06. Citation: TCN-2024-NCLT-00878. The case involves a company petition filed by JC Flowers Asset Reconstruction Pvt Ltd…

- **Court:** NCLT
- **Order date:** 6 Aug 2024
- **Citation:** TCN-2024-NCLT-00878
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/gvk-transportation-private-limited-efa3a480

## Summary

### Background

The case involves a company petition filed by JC Flowers Asset Reconstruction Pvt Ltd (Financial Creditor) against GVK Transportation Pvt Ltd (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor had provided a corporate guarantee for credit facilities availed by its subsidiary, GVK Deoli Kota Expressway Private Limited. The principal borrower defaulted, leading to the invocation of the corporate guarantee. The Financial Creditor sought to initiate CIRP against the Corporate Debtor based on this guarantee.

## Facts

GVK Deoli Kota Expressway Private Limited, a subsidiary of GVK Transportation Pvt Ltd, was awarded a project for four-laning a section of NH-12 in Rajasthan. To finance this project, it availed credit facilities from various lenders, including Yes Bank Ltd. GVK Transportation Pvt Ltd provided corporate guarantees for these credit facilities. Yes Bank later assigned the debt to JC Flowers Asset Reconstruction Pvt Ltd. The principal borrower defaulted on its repayment obligations. The National Highway Authority of India (NHAI) terminated the Concession Agreement with the principal borrower, leading to termination payments. The Financial Creditor issued a recall notice and invoked the corporate guarantee. Despite this, the Corporate Debtor failed to repay the outstanding

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## Issues and analysis

### Issue 1: Whether a financial debt of a sum exceeding Rs. one crore is due and payable by the respondent to …

**Ratio:** The liability of the surety is co-extensive with that of the principal debtor, unless it

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**Reasoning:** The Tribunal found that the due execution of the deed of guarantee by the

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**Interpretation:** The legal position is that the liability of the surety is co-extensive with

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**Application:** The Tribunal applied the legal principle to the facts of the case, noting that

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** M/s. JC Flowers…
- **Respondents:** GVK Transportation…; GVK Transportation…

## Timeline

- **2010-05-17 — Concession Ag…**: NHAI awarded the principal borrower the work of four-laning of the highway in question…
- **2011-01-05 — Common Rupee Loan…**: Principal borrower, Consortium Lenders, and the Financial Creditor entered into a Common…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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