# In the matter of Indiabulls Housing Finance Ltd. & Ors. vs. Dr. Subhash Chandra & Ors.

> NCLT judgment dated 2024-04-22. Citation: TCN-2024-NCLT-01660. The case involves a company petition filed by Indiabulls Housing Finance Ltd. against Dr.…

- **Court:** NCLT
- **Order date:** 22 Apr 2024
- **Citation:** TCN-2024-NCLT-01660
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/indiabulls-housing-finance-ltd-ors-vs-dr-subhash-chandra-ors-fd80925f

## Summary

### Background

The case involves a company petition filed by Indiabulls Housing Finance Ltd. against Dr. Subhash Chandra, who acted as a personal guarantor for loans extended to Vivek Infracon Private Limited and other entities. Indiabulls sought to initiate insolvency resolution process against Dr. Chandra under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, due to defaults in loan repayments. The loans, totaling Rs. 726 crores, were secured by personal guarantees and securities. The financial creditor disbursed Rs. 170,00,00,000 in three tranches to Vivek Infracon Private Limited. Indiabulls issued notices to the borrowers and Dr. Chandra for non-maintenance of security cover and demanded repayment. A deed of guarantee was executed by Dr. Chandra on 05.12.2018,

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## Facts

Indiabulls Housing Finance Ltd. extended financial facilities totaling Rs. 726 crores to Vivek Infracon Private Limited and other entities, secured by personal guarantees from Dr. Subhash Chandra and other securities. The loan agreement with Vivek Infracon Private Limited was dated 13.12.2016, with disbursements totaling Rs. 170,00,00,000. Indiabulls issued a notice on 14.11.2018 to the borrowers for non-maintenance of minimum security cover, demanding either Rs. 287,85,49,976 or additional shares worth Rs. 341,82,78,097. An additional undertaking was given on 29.11.2018, committing to a prepayment of Rs. 100 crores by 31.12.2018 and execution of a guarantee deed by Dr. Chandra by 05.12.2018. Dr. Chandra executed a deed of guarantee on 05.12.2018, committing to pay Rs.

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## Issues and analysis

### Issue 1: Whether the Deed of Guarantee executed by Dr. Subhash Chandra is vitiated by misrepresentation, …

**Ratio:** The court applied the principles of contract law, specifically Sections 15 to 18 of the

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**Reasoning:** The court reasoned that Dr. Chandra executed the guarantee deed in the presence of two

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**Interpretation:** The court interpreted the provisions of the Indian Contract Act to mean that a

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**Application:** The court applied these principles to the facts and found that Dr. Chandra

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## Parties

- **Judges:** SH. ASHOK KUMAR…; SH. SUBRATA KUMAR…
- **Appellants:** Indiabulls…
- **Respondents:** Vivek Infracon…; Subhash C…
- **Advocates:** Sumesh D…; Shaurya…; +10 more

## Timeline

- **2016-12-13 — Loan Agre…**: Loan agreement between Indiabulls Housing…
- **2018-11-14 — Notice for Non-Maintenan…**: Indiabulls Housing Finance Ltd. issued a notice to the borrowers for non-maintenance of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95 — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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