# In the matter of Ushdev Engitech Limited C.P.(IB) No. 119 of 2021

> NCLT judgment dated 2023-04-26. Citation: TCN-2023-NCLT-03625. ICICI Bank Limited, the Financial Creditor, filed a Company Petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 26 Apr 2023
- **Citation:** TCN-2023-NCLT-03625
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ushdev-engitech-limited-cpib-no-119-of-2021-0dbf8e6b

## Summary

### Background

ICICI Bank Limited, the Financial Creditor, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Ushdev Engitech Limited, the Corporate Debtor. The petition alleges that the Corporate Debtor defaulted in making payments against a financial debt of Rs. 34,66,47,177.42/-. The Corporate Debtor had provided a corporate guarantee for the facilities extended to Ushdev International Limited (UIL), the Principal Borrower. UIL is already undergoing CIRP. The Corporate Debtor contested the petition, arguing that the corporate guarantee was obtained under coercion and that the debt stood extinguished due to the approval of a resolution plan for the Principal Borrower.

## Facts

ICICI Bank Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Ushdev Engitech Limited (Corporate Debtor). The claim is based on a corporate guarantee provided by Ushdev Engitech Limited for the financial facilities extended to Ushdev International Limited (UIL), the Principal Borrower. The total financial debt claimed is Rs. 34,66,47,177.42/-. Ushdev International Limited is already undergoing CIRP as per the order dated 14 May 2018. ICICI Bank advanced working capital facilities aggregating to INR 2,500 Million to UIL. INR 1,500 Million was advanced as part of a consortium led by State Bank of India, and the remaining INR 1000 Million was advanced

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## Issues and analysis

### Issue 1: Whether the approval of the resolution plan for the Principal Borrower, Ushdev International …

**Ratio:** A resolution plan does not ipso facto discharge a personal guarantor or a corporate

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**Reasoning:** The Tribunal relied on the judgment of the Hon'ble Supreme Court in the case of Lalit

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**Interpretation:** The Supreme Court's ruling in Lalit Kumar Jain clarifies that a corporate

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**Application:** In this case, the resolution plan for Ushdev International Limited did not

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## Parties

- **Judges:** Kuldip Kumar…; ANURADHA SANJAY…
- **Appellants:** ICICI Bank…
- **Respondents:** Ushdev Engitech…

## Timeline

- **2016-08-10 — Execution of Guarantee…**: The Corporate Debtor executed the guarantee…
- **2016-12-08 — Loan Account Classified…**: The loan account of the Principal Borrower was classified as a Non-Performing Asset (NPA)…

## 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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