# In he matter of UV Asset Reconstruction Company Limited vs. Electrosteel Castings Limited

> SC judgment dated 2026-01-06. Citation: TCN-2026-SC-00004. UV Asset Reconstruction Company Limited appealed against the NCLAT's decision, which upheld the…

- **Court:** SC
- **Order date:** 6 Jan 2026
- **Citation:** TCN-2026-SC-00004
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/in-he-matter-of-uv-asset-reconstruction-company-limited-vs-electrosteel-castings-d1c49d0a

## Summary

### Background

UV Asset Reconstruction Company Limited appealed against the NCLAT's decision, which upheld the NCLT's rejection of their application under Section 7 of the IBC. The core issue revolves around interpreting Clause 2.2 of a Deed of Undertaking to determine if it constitutes a contract of guarantee.

## Facts

SREI Infrastructure Finance Limited (SREI) was the original creditor.

UV Asset Reconstruction Company Limited is the appellant, having acquired rights from SREI.

Electrosteel Steels Limited (ESL) is the borrower.

Electrosteel Castings Limited (ECL) is the erstwhile promoter of ESL and obligor in the Deed of Undertaking.

ESL availed financial assistance of INR 500 crores from SREI pursuant to a sanction letter dated 26.07.2011.

The sanction letter only stipulated a demand promissory note and post-dated cheques as security.

ECL executed a Deed of Undertaking, warranty, and indemnity dated 27.07.2011, undertaking a limited obligation to arrange for infusion of funds into ESL.

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## Issues and analysis

### Issue 1: Whether Clause 2.2 of the Deed of Undertaking constitutes a contract of guarantee under Section 126 …

**Ratio:** Clause 2.2 does not

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**Reasoning:** The clause obligates ECL to arrange for the infusion of funds into ESL, but it does not

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**Interpretation:** A guarantee requires a specific undertaking or unambiguous affirmation to

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**Application:** The court applied the principles of contract interpretation and the

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## Parties

- **Judges:** ALOK AR…; Sanjay…
- **Appellants:** UV Asset Reconstru…
- **Respondents:** Electrosteel…; Electrosteel…
- **Other parties:** SREI Infrastructur…; State Bank of…; +1 more

## Timeline

- **2011-07-26 — Sanction…**: SREI issued a sanction letter to ESL for…
- **2011-07-27 — Deed of Unde…**: ECL executed a Deed of…

## 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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