# In the matter of Tuscan Consultants and Developers Pvt. Ltd.

> NCLT judgment dated 2023-10-09. Citation: TCN-2023-NCLT-01332. The case involves an application filed by IDBI Trusteeship Services Limited, the Financial…

- **Court:** NCLT
- **Order date:** 9 Oct 2023
- **Citation:** TCN-2023-NCLT-01332
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/tuscan-consultants-and-developers-pvt-ltd-69673e8b

## Summary

### Background

The case involves an application filed by IDBI Trusteeship Services Limited, the Financial Creditor, against Tuscan Consultants and Developers Private Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a total sum of Rs.212,31,79,848/- as the financial debt due and payable by the Corporate Debtor, stating that the default commenced from September 30, 2021, due to non-payment of principal and interest under a Loan Agreement. The Corporate Debtor was a guarantor for Ozone Projects Private Limited, the Principal Borrower, for debentures issued to Debenture Holders. The Principal Borrower defaulted on its obligations, leading to the

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## Facts

IDBI Trusteeship Services Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Tuscan Consultants and Developers Private Limited (Corporate Debtor) to initiate Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed Rs.212,31,79,848/- as financial debt. The Corporate Debtor was a guarantor for Ozone Projects Private Limited (Principal Borrower) for debentures issued to Debenture Holders (India Bulls Real Estate Fund and Patni Healthcare Limited). The Principal Borrower defaulted on its obligations under a Debenture Trust Deed dated 29.06.2016, where 1,263 debentures, each with a face value of INR 10,00,000, totaling Rs.126,30,00,000, were issued. The redemption date was extended

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## Issues and analysis

### Issue 1: Whether CIRP can be initiated against the Corporate Guarantor without exhausting remedies against …

**Ratio:** The Supreme Court in Laxmi Pat Surana v. Union Bank of India and Another (2021) 8 SCC 481

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**Reasoning:** The Tribunal relied on the Supreme Court's judgments, which clarified that Section 7 of

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**Interpretation:** The interpretation of Section 7 of the IBC, as clarified by the Supreme Court,

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**Application:** In this case, the Corporate Debtor acted as a corporate guarantor for the

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** IDBI Trusteeship…
- **Respondents:** Tuscan Consultants…

## Timeline

- **2016-06-29 — Corporate Guarantee…**: Corporate Guarantee Agreement executed by the Corporate Debtor in favour of the Financial…
- **2016-06-29 — Debenture Tru…**: Debenture Trust Deed executed between the Applicant/Financial Creditor and Ozone Projects…

## 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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