SPM bank extended credit facilities to Anuj Constructions (The Principal Borrower), a proprietary firm, in 2023. Gita Steel Limited (The Guarantor) provided guarantee for credit facilities provided to Anuj Constructions

"Corporate Person" means a company as defined in clause (20) of section 2 of the Companies Act, 2013, a limited liability partnership, as defined in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008, or any other person incorporated with limited liability under any law for the time being in force but shall not include any financial service provider [Section 3(7) of the IBC, Code]. National Highway Authority of India (NHAI) is a statutory body which functions as an extended limb of the Central Government and performs Governmental functions which obviously cannot be taken over by an RP, or by any other corporate body nor can NHAI ultimately be wound up under the Code. For all these reasons, it is not possible to either read in, or read down; the definition of 'corporate person' in section 3(7) of the Code to include NHAI. ( Hindustan Construction Company Ltd. & Anr. Vs. Union of India & Ors. [WP (Civil) No. 1074 of 2019 with other Civil Appeals] SC judgement dated 27.11.2019) "Corporate Debtor" means a corporate person who owes a debt to any person [Section 3(8) of IBC, 2016]. The facts of the present case are similar to the facts in " Laxmi Pat Surana Vs. Union Bank of India & Anr ". In the above-mentioned case, the Hon'ble Supreme Court held that: If a corporate person extends guarantee for the loan transaction concerning a principal borrower not being a corporate person, it would still be covered within the meaning of expression "corporate debtor" in section 3(8) of the Code. Hence in this particular case, the status of a guarantor, Gita Steel Limited, who is a corporate person, metamorphoses into corporate debtor, when the principal borrower Anuj Constructions (The Principal Borrower), a proprietary firm (regardless of not being a corporate person) commits default in the payment of debt which had become due and payable. Thus, the action under Section 7 of the Code can be legitimately invoked against a (corporate) guarantor being a corporate debtor and the contention of the Board of Directors of Gita Steel Limited is not tenable.