# In the matter of Vrinda Ispat Private Limited

> NCLT judgment dated 2024-01-08. Citation: TCN-2024-NCLT-03257. Vrinda Ispat Private Limited filed a petition under Section 10 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 8 Jan 2024
- **Citation:** TCN-2024-NCLT-03257
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vrinda-ispat-private-limited-35ccbb05

## Summary

### Background

Vrinda Ispat Private Limited filed a petition under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against itself. The application was filed through its directors, Mr. Om Prakash Singh and Mr. Parmatma Prasad. The corporate applicant admitted to having financial creditors and a total default amount of ₹84,91,92,904/-. The corporate applicant is a guarantor to two principal borrowers, M/s Keshav Sponge and Energy Pvt ltd and Shri Bandrinarain Alloys and Steel Ltd, for credit facilities sanctioned by a consortium of lenders. The principal borrowers and guarantors failed to make payments, leading to their accounts being classified as NPA. Notices were issued under Section 13(2) of the SARFAESI

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## Facts

Vrinda Ispat Private Limited (Corporate Applicant) filed a petition under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP against itself. The company was incorporated on 25.03.1988. The nominal share capital is ₹1,00,00,000/- and the paid-up share capital is ₹87,09,200/-. The Corporate Applicant admitted to having financial creditors and a total default amount of ₹84,91,92,904/-. The Corporate Applicant is a guarantor to two principal borrowers, M/s Keshav Sponge and Energy Pvt ltd and Shri Bandrinarain Alloys and Steel Ltd. The principal borrowers and guarantors failed to make payments, leading to their accounts being classified as NPA. Notices were issued under Section 13(2) of the SARFAESI Act, 2002. The first invocation of

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## Issues and analysis

### Issue 1: Whether the application filed by the …

**Ratio:** The 'date of default' for a guarantor is counted from the date of invocation of the

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**Reasoning:** The court relied on the NCLAT's precedent, which held that the default on the part of the

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**Interpretation:** The interpretation of the law is that the limitation period for initiating CIRP

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**Application:** In this case, the first invocation of the guarantee was on 26.04.2016. The

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## Parties

- **Judges:** Rohit K…; Balraj…; +1 more
- **Respondents:** Vrinda Ispat…
- **Advocates:** Joy S…; Sumit B…; +1 more

## Timeline

- **1988-03-25 — Incorporation of…**: Vrinda Ispat Private…
- **2016-04-26 — First Invocation of…**: Punjab National Bank issued the first letter of invocation under section 13(2) of the…

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