# In the matter of Iskon Infra Engineering Private Limited

> NCLT judgment dated 2023-11-21. Citation: TCN-2023-NCLT-00668. The case pertains to the voluntary liquidation of M/s. Iskon Infra Engineering Private Limited…

- **Court:** NCLT
- **Order date:** 21 Nov 2023
- **Citation:** TCN-2023-NCLT-00668
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/iskon-infra-engineering-private-limited-a1362dad

## Summary

### Background

The case pertains to the voluntary liquidation of M/s. Iskon Infra Engineering Private Limited under Section 59 of the Insolvency and Bankruptcy Code, 2016. The company was incorporated on 26.10.2009 under the Companies Act, 1956. The liquidator filed an application seeking dissolution of the company. The RoC and Central Bank of India raised objections, pointing out outstanding charges against the company, failure to file balance sheets, and the company's role as a corporate guarantor for Abhinav Steels and Power Limited, which is undergoing CIRP. The liquidator contended that the Central Bank of India cannot claim the same amount of debt from both the principal borrower and corporate guarantor simultaneously.

## Facts

M/s. Iskon Infra Engineering Private Limited initiated voluntary liquidation under Section 59 of the IBC, 2016. The company was incorporated on 26.10.2009. The liquidator made a public announcement and opened a bank account for realizing assets. The liquidator realized Rs. 1,93,897 from the current assets. The company had non-current investments of Rs 1,96,82,470 approx. in forms of unquoted shares. The RoC raised objections, noting outstanding charges against the company and failure to file balance sheets. The Central Bank of India objected, stating that the company was a corporate guarantor for Abhinav Steels and Power Limited, which is undergoing CIRP. Abhinav Steels and Power Limited had been granted a term loan and working capital facilities by a consortium of

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## Issues and analysis

### Issue 1: Whether the guarantor's liability is absolved when …

**Ratio:** The guarantor's liability is co-extensive with that of the principal debtor and is not

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**Reasoning:** The Tribunal relied on the principle that a guarantor's liability is co-extensive with

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**Interpretation:** This principle means that the creditor can pursue the guarantor for the debt

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**Application:** In this case, the company, as a corporate guarantor for Abhinav Steels and

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## Parties

- **Judges:** P.S.N. P…; RAHUL BHA…
- **Appellants:** M/s. Iskon Infra…
- **Respondents:** Iskon Infra…

## Timeline

- **2009-10-26 — Company Incor…**: M/s. Iskon Infra Engineering Private Limited was incorporated under the Companies Act,…
- **2021-06-20 — Board Me…**: Board of Director at Board meeting decided to liquidate the Company voluntarily under…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 59 — Voluntary liquidation of corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-59)

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