# In the matter of Shipra Estate Ltd.

> NCLT judgment dated 2024-01-24. Citation: TCN-2024-NCLT-02946. The case involves a Company Petition filed by IDBI Trusteeship Services Limited, acting as a…

- **Court:** NCLT
- **Order date:** 24 Jan 2024
- **Citation:** TCN-2024-NCLT-02946
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shipra-estate-ltd-9f413db4

## Summary

### Background

The case involves a Company Petition filed by IDBI Trusteeship Services Limited, acting as a Debenture Trustee for IIFL Finance Limited, against Shipra Estate Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The petition seeks to initiate Corporate Insolvency Resolution Process (CIRP) against Shipra Estate Limited, which acted as a corporate guarantor for a Debenture Trustee Deed entered into with Just About Movies Private Limited (JAMPL). IIFL disbursed a total of INR 229,13,00,000 to JAMPL. JAMPL defaulted on repayments starting July 1, 2021, leading to the invocation of the corporate guarantee by IIFL. Shipra Estate Limited failed to discharge its payment obligations, resulting in the application for CIRP.

## Facts

IIFL Finance Limited disbursed INR 229,13,00,000 to Just About Movies Private Limited (JAMPL) through a Debenture Trustee Deed. Shipra Estate Limited acted as the corporate guarantor for JAMPL. JAMPL defaulted on its repayment obligations starting 01.07.2021. A loan recall notice was issued to JAMPL, Shipra Estate Limited, and Mr. Mohit Singh (personal guarantor). A notice specifically invoking the corporate guarantee was issued to Shipra Estate Limited on 02.08.2021. Shipra Estate Limited failed to discharge its payment obligations within one day of receiving the invocation notice, resulting in a default on 02.08.2021. Shipra Estate Limited, through its director Mr. Mohit Singh, assured IIFL on 14.10.2021 that it would discharge its payment obligations. JAMPL failed

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable …

**Ratio:** The liability of a guarantor is co-extensive with that of the principal borrower, as per

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**Reasoning:** The Adjudicating Authority relied on the decision of the Supreme Court in Laxmi Pat

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**Interpretation:** Section 128 of the Contract Act establishes the principle of co-extensive

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**Application:** Shipra Estate Limited, as the corporate guarantor for JAMPL, is liable for the

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## Parties

- **Judges:** MANNI SANKARIAH…; Sanjeev R…
- **Appellants:** IDBI Trusteeship…
- **Respondents:** Shipra Estate…

## Timeline

- **2019-03-30 — First Disbu…**: The first disbursement of the debt…
- **2021-05-12 — Last Disbur…**: The last disbursement of the debt…

## 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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