# In the matter of K. Parmasivam Vs. The Karur Vysya Bank Ltd. & Anr., Civil Appeal No. 9286 of 2019

> SC judgment dated 2022-09-06. Citation: TCN-2022-SC-00026. This is an appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC), against a…

- **Court:** SC
- **Order date:** 6 Sept 2022
- **Citation:** TCN-2022-SC-00026
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/k-parmasivam-vs-the-karur-vysya-bank-ltd-anr-civil-appeal-no-9286-of-2019-5fb985ab

## Summary

### Background

This is an appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC), against a final judgment and order dated 18th November 2019, passed by the National Company Law Appellate Tribunal (NCLAT). The NCLAT dismissed the Company Appeal (AT) (Insolvency) No.538 of 2019, which was against an order dated 8th April 2019 passed by the Adjudicating Authority. The Adjudicating Authority had admitted the application filed by the Respondent No.1 being CP/1314/IB/2018 under Section 7 of the IBC for initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Maharaja Theme Parks and Resorts Private Limited.

## Facts

Maharaja Theme Parks and Resorts Private Limited is the corporate debtor. The Appellant is the promoter, shareholder, and suspended/discharged director of Maharaja Theme Parks and Resorts. The Karur Vysya Bank Ltd. & Anr. is the Financial Creditor. The Financial Creditor had advanced credit facilities to three entities: Sri Maharaja Refineries, Sri Maharaja Industries, and Sri Maharaja Enterprises, none of which are corporate debtors. Maharaja Theme Parks and Resorts stood as guarantor for the loans availed by these three borrowers. The borrowers failed to repay the debts. The Financial Creditor filed an application under Section 7 of the IBC for initiation of CIRP against Maharaja Theme Parks and Resorts. Maharaja Theme Parks and Resorts argued that it is not a

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## Issues and analysis

### Issue 1: Whether an action under Section 7 of the IBC can be initiated by a Financial Creditor against a …

**Ratio:** The liability of the guarantor is co-extensive with that of the principal borrower. The

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**Reasoning:** The court reasoned that the definition of 'corporate debtor' in Section 3(8) of the IBC

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**Interpretation:** The court interpreted Section 3(8) of the IBC broadly to include corporate

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**Application:** In this case, Maharaja Theme Parks and Resorts, being a corporate person,

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## Parties

- **Judges:** INDIRA BA…; J.K. MAHE…
- **Appellants:** K. Parama…
- **Respondents:** Maharaja Theme…; The Karur Vysya…

## Timeline

- **2018-10-24 — Application under…**: The Financial Creditor filed an application under Section 7 of the IBC being…
- **2019-04-08 — Adjudicating Authority…**: The Adjudicating Authority admitted the petition under Section 7 of the IBC and initiated…

## 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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