# In the matter of Transparent Agro Pvt. Ltd. IB-623-(ND)-2021

> NCLT judgment dated 2023-05-17. Citation: TCN-2023-NCLT-03294. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 17 May 2023
- **Citation:** TCN-2023-NCLT-03294
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/transparent-agro-pvt-ltd-ib-623-nd-2021-2255b517

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by M/s Bhabani Pigments Pvt. Ltd. (Financial Creditor) against M/s. Transparents Agro Pvt. Ltd. (Corporate Debtor/Guarantor). The Financial Creditor sought to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor based on a default in repayment of a loan. The Corporate Debtor had provided a guarantee for a loan taken by M/s Emergent Traders Private Limited from the Financial Creditor. The Financial Creditor had already initiated CIRP against M/s Emergent Traders Private Limited.

## Facts

M/s Bhabani Pigments Pvt. Ltd. (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Transparents Agro Pvt. Ltd. (Corporate Debtor/Guarantor) seeking to initiate CIRP. The Financial Creditor had extended a loan to M/s Emergent Traders Private Limited, for which the Corporate Debtor acted as a guarantor. A Business Loan Agreement was executed on 10.10.2018, wherein the FC granted a loan of Rs. 3,00,00,000/- repayable with interest @ 12% per annum payable at the time of maturity i.e. 31.01.2020. The Financial Creditor disbursed Rs. 3,00,00,000/- to M/s Emergent Traders Private Limited on 15.10.2018 and 20.03.2019. Subsequently, another loan agreement was executed on 20.12.2019 for Rs. 1,50,00,000/- with interest

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## Issues and analysis

### Issue 1: Whether CIRP can be initiated against a Corporate Guarantor for the same debt if CIRP has already …

**Ratio:** CIRP cannot be initiated against the Corporate Guarantor for the same debt if CIRP has

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**Reasoning:** The Tribunal relied on the judgment of the NCLAT in Dr. Vishnu Kumar Agarwal Vs M/s

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**Interpretation:** The interpretation of the Insolvency and Bankruptcy Code, as clarified by the

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**Application:** In this case, the Financial Creditor had already initiated CIRP against M/s

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## Parties

- **Judges:** SHRI. P.S.N.…; SHRI. RAHUL…
- **Appellants:** Bhabani Pigments…
- **Respondents:** M/s. Transparents…

## Timeline

- **2018-10-10 — Business Loan…**: A Business Loan Agreement was executed between the Financial Creditor and M/s Emergent…
- **2018-10-15 — Disbursement of Loan…**: The Financial Creditor disbursed Rs. 2,00,00,000/- to M/s Emergent Traders Private…

## 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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