Pranav B Prem

The National Company Law Tribunal (NCLT) at New Delhi has admitted Canara Bank’s application to initiate the corporate insolvency resolution process (CIRP) against Equinox India Developments Limited—formerly Indiabulls Real Estate Limited—over an alleged default of ₹372.35 crore arising out of corporate guarantees furnished for loans extended to Sinnar Thermal Power Limited for its coal-based power project in Maharashtra.

Also Read: NCLT Ahmedabad: Complaints Against Auditors Or Company Secretaries Cannot Justify SFIO Probe Into Company; Petition Dismissed For Lack Of Locus Standi

In its order dated December 9, 2025, the Bench comprising Judicial Member Manni Sankariah Shanmuga Sundaram and Technical Member Atul Chaturvedi rejected the company’s contention that the proceedings were barred by Section 10A of the Insolvency and Bankruptcy Code, which had suspended initiation of insolvency applications for defaults occurring between March 25, 2020 and March 24, 2021 due to the COVID-19 crisis. The tribunal clarified that the bar under Section 10A is attracted only when the default itself first occurs during that protected period.

The tribunal observed that the borrower’s account had been classified as a non-performing asset on September 28, 2017 and held that Equinox could not attempt to shift the date of default to October 4, 2020 merely to fall within the suspension window. It noted that “intention of the legislature is to completely bar the institution of any application ever for initiation of CIRP for the default having occurred during the period 25.03.2020 till 24.03.2021. Where the default is shown to have arisen on 28.09.2017, Section 10A cannot be invoked to shield a pre-existing default.”

Also Read: NCLT Mumbai Upholds IL&FS’ Contractual Power to Revise Sale Price of BKC Headquarters; Rejects Chronos’ Plea to Enforce ₹1,080-Crore LoI

The dispute originated from a loan exposure of ₹144.40 crore sanctioned by a consortium of banks to Sinnar Thermal Power Limited. Equinox had executed corporate guarantees in 2010 and 2016 in support of the borrower. After repeated non-payment and recall of the loan, Canara Bank invoked the guarantees and approached the NCLT seeking initiation of insolvency proceedings.

Equinox argued that the corporate guarantees had been extinguished under a restructuring scheme approved by the Delhi High Court in 2011 and further claimed that a 2012 deed of guarantee made other entities responsible, thereby relieving it of its obligations. The tribunal rejected both claims. It held that the 2012 Deed of Guarantee “clearly mentions that Respondent (IBREL) to continue to be responsible for fulfilling obligations in event of default by substituted guarantors,” thereby negating the argument of discharge.

Also Read: Rectification Of Register Cannot Be Granted Without Proof Of Share Ownership: NCLT Ahmedabad Dismisses Symphony’s Appeal Over Alleged Fraudulent Transfers

The Bench also emphasised that steps taken by lenders under the SARFAESI Act—such as issuance of notice, possession or auction—are merely consequences of a default and “do not postpone or shift the date of default.” Further, the tribunal found that Equinox had placed no document on record to show that the bank had ever released it from its guarantee obligations. Finding that Canara Bank had established both the existence of a financial debt and a clear default, the tribunal admitted the application under Section 7 of the IBC. It appointed Prabhat Ranjan Singh as the Interim Resolution Professional and imposed a moratorium on the assets of Equinox India Developments Limited in accordance with Section 14 of the Code.

Appearance

For Applicant: Advocates Hitesh Sachar and Anju Jain

For Respondent: Advocate Siddharth Joshi

Cause Title: Canara Bank v. Equinox India Developments Limited

Case No: CP(IB)No. 317/ND/2025

Coram: Judicial Member Manni Sankariah Shanmuga Sundaram , Technical Member Atul Chaturvedi