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

> NCLT judgment dated 2023-05-17. Citation: TCN-2023-NCLT-03286. 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-03286
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/transparent-agro-pvt-ltd-ib-623-nd-2021-66635541

## 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) for a default in repayment of a loan amounting to Rs. 4,89,24,986/-. The Financial Creditor had previously granted loans to M/s Emergent Traders Private Limited, and the Corporate Debtor acted as a guarantor for these loans. The Financial Creditor had already initiated CIRP against the principal borrower, M/s Emergent Traders Private Limited, and the application was admitted.

## Facts

M/s Bhabani Pigments Pvt. Ltd. (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Transparents Agro Pvt. Ltd. (Corporate Debtor), seeking initiation of Corporate Insolvency Resolution Process (CIRP) due to a default in repayment of a loan amounting to Rs. 4,89,24,986/-. The Financial Creditor had extended loans to M/s Emergent Traders Private Limited, with the Corporate Debtor acting as a guarantor. A Business Loan Agreement was executed on 10.10.2018, where the Financial Creditor granted a loan of Rs. 3,00,00,000/- to M/s Emergent Traders Private Limited, repayable with interest at 12% per annum. The Financial Creditor disbursed Rs. 3,00,00,000/- on 15.10.2018 and 20.03.2019. Subsequently, another

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## Issues and analysis

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

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

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**Reasoning:** The court relied on the NCLAT's judgment, which clarified that while simultaneous

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**Interpretation:** The interpretation of Section 7 of the IBC, along with the NCLAT's ruling,

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**Application:** In this case, since CIRP had already been admitted against M/s Emergent Traders

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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…**: 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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