UV Asset Reconstruction Company Limited (appellant) filed an appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC) against a judgment dated 24.01.2024 by the National Company Law Appellate Tribunal (NCLAT). The NCLAT had affirmed an order dated 24.06.2022 passed by the Adjudicating Authority (NCLT), which rejected the appellant's application under Section 7 of the Code. The NCLT's rejection was based on two grounds: (i) Electrosteel Castings Limited (ECL) was not a guarantor for financial facilities availed by Electrosteel Steels Limited (ESL), and (ii) the conversion of ESL's debt into equity under a resolution plan extinguished any liability of ECL. The central issue before the Supreme Court was the interpretation of Clause 2.2 of a Deed of
…Electrosteel Steels Limited (ESL) availed financial assistance of INR 500 crores from SREI Infrastructure Finance Limited (SREI) pursuant to a sanction letter dated 26.07.2011.
The sanction letter stipulated only a demand promissory note and post-dated cheques as security, without requiring 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 into ESL.
On 26.07.2011, SREI issued an addendum to the sanction letter, providing for an additional security in the form of a subservient charge over movable and project assets of ESL.
…Sign in to view the parties.
ESL availed financial assistance of INR 500…
ECL executed a…
UV Asset Reconstruction Company Limited (appellant) filed an appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC) against a judgment dated 24.01.2024 by the National Company Law Appellate Tribunal (NCLAT). The NCLAT had affirmed an order dated 24.06.2022 passed by the Adjudicating Authority (NCLT), which rejected the appellant's application under Section 7 of the Code. The NCLT's rejection was based on two grounds: (i) Electrosteel Castings Limited (ECL) was not a guarantor for financial facilities availed by Electrosteel Steels Limited (ESL), and (ii) the conversion of ESL's debt into equity under a resolution plan extinguished any liability of ECL. The central issue before the Supreme Court was the interpretation of Clause 2.2 of a Deed of
…Electrosteel Steels Limited (ESL) availed financial assistance of INR 500 crores from SREI Infrastructure Finance Limited (SREI) pursuant to a sanction letter dated 26.07.2011.
The sanction letter stipulated only a demand promissory note and post-dated cheques as security, without requiring 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 into ESL.
On 26.07.2011, SREI issued an addendum to the sanction letter, providing for an additional security in the form of a subservient charge over movable and project assets of ESL.
…ESL availed financial assistance of INR 500…
ECL executed a…