# In the matter of Vikas Multiplex Developers Private Limited (IB) No. 1027(PB)-2018

> NCLT judgment dated 2023-06-15. Citation: TCN-2023-NCLT-02936. This case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 15 Jun 2023
- **Citation:** TCN-2023-NCLT-02936
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vikas-multiplex-developers-private-limited-ib-no-1027pb-2018-3513c0db

## Summary

### Background

This case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Omkara Asset Reconstruction Private Limited (Financial Creditor) against Vikas Multiplex Developers Private Limited (Corporate Guarantor). The application seeks to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Guarantor based on a guarantee provided for loans extended by L&T Finance Limited to Zillion Infra Projects Private Limited (Principal Borrower). L&T Finance Limited assigned its debts to Omkara Asset Reconstruction Private Limited on 24.09.2019. The Principal Borrower defaulted on the loans, leading to the invocation of the guarantee by L&T Finance and subsequently by Omkara. CIRP proceedings against the Principal

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## Facts

On 10.11.2014, Zillion Infra Projects Private Limited (Principal Borrower) executed a deed of hypothecation in favor of L&T Finance to secure a loan facility of Rs. 13,00,00,000. L&T Finance extended a loan of Rs. 13 Crores on 15.12.2014. Further loan facilities were extended on 11.12.2015 and 14.12.2015, amounting to Rs. 6 crores and Rs. 12 crores respectively. A supplementary agreement was executed on 22.10.2016, revising the second loan to Rs. 4 crores while the third loan remained at Rs. 12 crores. Vikas Multiplex Developers Private Limited (Corporate Guarantor) provided a guarantee on 02.12.2016 for an amount not exceeding Rs. 29 crores. The Principal Borrower defaulted on all three loans, leading L&T Finance to declare the accounts as NPA on

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## Issues and analysis

### Issue 1: Whether the application for initiating CIRP against the Corporate Guarantor is maintainable when …

**Ratio:** The principle established in Athena Energy allows for parallel CIRP proceedings against

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**Reasoning:** The Adjudicating Authority relied on the judgment of Athena Energy, which held that

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**Interpretation:** The interpretation of the IBC, particularly in the context of guarantees, is

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**Application:** In this case, CIRP proceedings were already admitted against the Principal

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** M/s Omkara Asset…
- **Respondents:** M/s Vikas…

## Timeline

- **2014-11-10 — Deed of Hypot…**: Zillion Infra Projects Private Limited executed a deed of hypothecation in favor of L&T…
- **2014-12-15 — Loan Exte…**: L&T Finance extended a loan of Rs. 13 Crores…

## 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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