CIRP application u/s. 7(2) of IBC against Corporate Guarantor admitted as default proved

Canara Bank Vs Sitaram Prints Private Limited (NCLT Ahmedabad)

NCLT Ahmedabad held that application u/s. 7(2) of Insolvency and Bankruptcy Code [IBC] for initiation of corporate insolvency resolution process [CIRP] against Corporate Guarantor admitted as default duly proved.

Facts- This Petition is filed on 09.04.2025 by the Applicant-Canara Bank (Financial Creditor) against the Respondent- Sitaram Prints Private Limited (Corporate Guarantor) under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP), to appoint Interim Resolution Professional and declare the moratorium for default in payment of the outstanding financial debt amounting to 15,99,67,298.36 as on 30.06.2020.

Conclusion- The present Petition is complete in terms of Section 7 (5) of the Code. The Tribunal finds that the Financial Creditor has discharged its burden of proof under Section 7 of the Code by demonstrating the existence of a financial debt and default in payment of the financial debt by the Corporate Guarantor. The outstanding financial debt is of more than rupees one crore, which meets the threshold limit as per section 4 of the IB Code, which is supported by comprehensive documentation. Moreover, the said default is not covered under the period exempted under Section 10A of the IBC, 2016.