NCLT Admits CIRP Against Corporate Guarantor for Hyderabad FC Loan Default, Holds Guarantee Liability as ‘Financial Debt’ [Read Order]

In a recent ruling, the Chennai Bench of the National Company Law Tribunal (NCLT) admitted a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, initiating Corporate Insolvency Resolution Process (CIRP) against Carbyne Spartek Private Limited, the corporate guarantor for a ₹2.95 crore loan extended to Hyderabad FC’s operating entity.

The petition was filed by R.K. Purushothaman, the financial creditor, who had disbursed the loan to De Grande Sports Private Limited (DSPL), the principal borrower and owner of Hyderabad FC, under a loan agreement dated 09.09.2020. The loan carried an interest rate of 8% per annum and was backed by a corporate guarantee executed by Carbyne Spartek Private Limited on the same date.

The petitioner, despite repeated oral and written demands, DSPL failed to repay the loan, prompting the creditor to issue a recall notice on 19.09.2024. When the principal borrower defaulted, the creditor invoked the corporate guarantee and issued a notice to the respondent, Carbyne Spartek, on 15.10.2024. The total outstanding as of 31.10.2024 stood at ₹3.62 crore, including interest.

On the other hand, the respondent was granted an opportunity to file its reply; however, having failed to do so, its right to file the reply stood forfeited by order dated 03.04.2025.

After analyzing the matter, the bench comprising Jyoti Kumar Tripathi (Judicial Member) and Ravichandran Ramasamy (Technical Member) stated that the corporate debtor’s liability under the guarantee constituted a “financial debt” under Section 5(8)(i) of the IBC.

The tribunal noted that it found sufficient evidence of default and admitted the petition, appointing Mr. Sabbani Maruthi as Interim Resolution Professional (IRP).

As a consequence, the moratorium under Section 14 of the IBC has come into effect, suspending all legal proceedings and enforcement actions against the corporate debtor. Also, the IRP has been directed to take charge and file a report within 20 days.

The Tribunal directed the Financial Creditor to deposit ₹2,00,000 with the Interim Resolution Professional (IRP) to cover initial expenses, subject to the IRP filing the required declaration.

Accordingly, Copies of the order were directed to be served on both the Financial Creditor and the Corporate Debtor, as well as forwarded to the Insolvency and Bankruptcy Board of India (IBBI) and the Registrar of Companies to record the initiation of CIRP against Carbyne Spartek Private Limited.

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