# In the matter of Koshika Bioscience Private Limited

> NCLT judgment dated 2024-04-16. Citation: TCN-2024-NCLT-01715. The case involves a petition filed by Indiabulls Commercial Credit Limited, the Financial…

- **Court:** NCLT
- **Order date:** 16 Apr 2024
- **Citation:** TCN-2024-NCLT-01715
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/koshika-bioscience-private-limited-9954bebc

## Summary

### Background

The case involves a petition filed by Indiabulls Commercial Credit Limited, the Financial Creditor, against Koshika Bioscience Private Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor had issued a corporate guarantee for Pro Fin Capital Financial Services Limited, which defaulted on its payments after the guarantee was invoked. The default amount was Rs. 59,51,46,866/-. The Financial Creditor provided financial assistance of Rs. 56,00,00,000/- to the Principal Borrower, secured by the Corporate Debtor's guarantee.

## Facts

Indiabulls Commercial Credit Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Koshika Bioscience Private Limited (Corporate Debtor). The Corporate Debtor had issued a corporate guarantee for Pro Fin Capital Financial Services Limited. Pro Fin Capital Financial Services Limited defaulted on payments, leading to the invocation of the guarantee. The default amount was Rs. 59,51,46,866/-. The Financial Creditor had provided financial assistance of Rs. 56,00,00,000/- to Pro Fin Capital Financial Services Limited, secured by a corporate guarantee from Koshika Bioscience Private Limited. The Corporate Debtor argued that the guarantee was in violation of

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor's guarantee is valid and enforceable under Section 186 of the …

**Ratio:** The Doctrine of Indoor Management allows an outsider dealing with a company to assume

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**Reasoning:** The court reasoned that after receiving the Board Resolution from the Corporate Debtor,

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**Interpretation:** Section 186 of the Companies Act, 2013, restricts a company's ability to

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**Application:** The court applied the Doctrine of Indoor Management to the facts of the case,

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## Parties

- **Judges:** Charanjeet Singh…; Smt Lakshmi…
- **Appellants:** Indiabulls…
- **Respondents:** Koshika Bioscience…

## Timeline

- **2021-01-18 — Sanction Lett…**: Sanction Letter issued by…
- **2021-01-19 — Loan Agreeme…**: Loan Agreement executed between the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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