Canara Bank vs Nugas Technolgies Pvt Ltd

IN THE MATTER OF: Canara Bank ...Appellant

Versus

Nugas Technologies Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Hitesh Sachar, Ms. Anju Jain, Advocates. For Respondent : Mr. D. Bhattacharya, Mr. Kshitij Goel, Mr. Rishav Sharma, Advocates.

ORDER

(Hybrid Mode)

11.11.2025: Heard learned counsel for the Appellant. Learned counsel for the Respondent has also appeared. This appeal has been filed against order dated 10.09.2025 by which Section 7 application filed by the Appellant has been rejected on the ground of 10A. The Adjudicating Authority in Para 10 has made following observations:

"10. It is the contention of the Respondent herein, that the present Application comes within the purview of provisions of Section 10A of the Code as the Guarantee was invoked by legal notice under Section 13 (2) of SARFAESI Act, 2OO2 on 26.08.2O2O which falls under the period specified under Section 10A of the Code. Therefore, before going into the merits of the case the issue which needs to be adjudicated is whether the date of default falls in the period specified under Section l0A of the Code?"

2. Learned counsel for the Appellant submits that the guarantee given by the Corporate Debtor is a continuing guarantee and further the Principal Borrower has already been admitted to the CIRP.

Cont'd.../

3. We have considered the submissions of learned counsel for the Appellant and perused the record.

4. The liability of Guarantor shall commence when guarantee is invoked and in the present case guarantee having been invoked during 10A period i.e. on 20.08.2020, the Adjudicating Authority has rightly taken the view that application under Section 7 is barred by 10A.

5. In so far as submission of the Appellant that the guarantee is a continuing guarantee, that cannot be a reason to ignore the bar under Section 10A. As far as CIRP against the Principal Borrower is concerned, proceeding against Principal Borrower and Guarantor can be pegged in two different default. CIRP against the Principal Borrower is admitted cannot be a reason to admit Section 7 application against the Guarantor. We, however, of the view that in event Bank has a case for initiating proceeding under section 7 on the basis of default committed subsequent to 10A period, it is always open for the bank initiate fresh proceeding under Section 7. Subject to above, appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Archana/md

Company Appeal (AT) (Ins.) No. 1588 of 2025 2 of 2