# Electrosteel Castings Limited vs. UV Asset Reconstruction Company Limited

> SC judgment dated 2026-01-06. Citation: TCN-2026-SC-00090. Electrosteel Limited (ESL) availed financial assistance from SREI, which later assigned its rights…

- **Court:** SC
- **Order date:** 6 Jan 2026
- **Citation:** TCN-2026-SC-00090
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/electrosteel-castings-limited-vs-uv-asset-reconstruction-company-limited-w4jr3

## Summary

### Background

Electrosteel Limited (ESL) availed financial assistance from SREI, which later assigned its rights to UV Asset Reconstruction Company Limited (ARC). Electrosteel Castings Limited (ECL), ESL's promoter, provided an undertaking for fund infusion and a first mortgage as security. ESL underwent Corporate Insolvency Resolution Process (CIRP), and a Resolution Plan was approved, converting a significant portion of its debt into equity. ARC, as assignee of SREI, filed a Section 7 IBC application against ECL, claiming residual debt and ECL's corporate guarantee. The NCLT dismissed the application, holding that ESL's debt was discharged and ECL was not a guarantor. The NCLAT, on appeal, agreed ECL was not a guarantor but held that the Resolution Plan did not extinguish debt

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## Facts

Electrosteel Limited (ESL) availed financial assistance of INR 500 crores from SREI Infrastructure Finance Limited (SREI) via a sanction letter dated 26.07.2011.

SREI subsequently assigned all its rights and interest in favour of UV Asset Reconstruction Company Limited (ARC).

The original sanction letter stipulated a demand promissory note and post-dated cheques as the only security, and did not require a personal or corporate guarantee from Electrosteel Castings Limited (ECL).

ECL, as the promoter of ESL, was required to furnish an undertaking to arrange for the infusion of funds.

An addendum to the sanction letter was issued by SREI, providing for an additional security in the form of a subservient charge over movable and project assets of ESL.

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## Issues and analysis

### Issue 1: Whether approval of the Resolution Plan of ESL resulted in extinguishment of entire debt, so as to …

**Ratio:** The approval of a Resolution Plan under the Insolvency and Bankruptcy Code, 2016, does

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**Reasoning:** The Resolution Plan for ESL involved a significant portion of debt being classified as

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**Interpretation:** The Resolution Plan's provisions, particularly Clause 3.2 (ix), are interpreted

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**Application:** Electrosteel Castings Limited (ECL), as a security provider/promoter, remains

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## Parties

- **Judges:** ALOK AR…; Sanjay…
- **Appellants:** Electrosteel…; UV Asset Reconstru…
- **Respondents:** Electrosteel…; UV Asset Reconstru…
- **Other parties:** Committee of…; SREI Infrastructur…; +2 more

## Timeline

- **2011-07-26 — Financial Assistance…**: Electrosteel Limited (ESL) availed financial assistance of INR 500 crores from SREI…
- **2011-07-27 — Deed of Undertaking…**: Electrosteel Castings Limited (ECL) executed a Deed of Undertaking, warranty, and…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 62 — Appeal to Supreme Court](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-62)

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