# In the matter of Mohit Dewan vs. Bank of Maharashtra & Anr.

> NCLAT judgment dated 2024-11-22. Citation: TCN-2024-NCLAT-00071. The appeals challenge the order passed by the National Company Law Tribunal, Chandigarh…

- **Court:** NCLAT
- **Order date:** 22 Nov 2024
- **Citation:** TCN-2024-NCLAT-00071
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mohit-dewan-vs-bank-of-maharashtra-anr-6b173355

## Summary

### Background

The appeals challenge the order passed by the National Company Law Tribunal, Chandigarh Bench, which admitted Section 95 applications filed by the appellants, who are personal guarantors. The appellants argue that there was an OTS proposal submitted by the principal borrower, approved by the bank for Rs. 7 crores, with Rs. 1.75 crores already paid. This OTS was subject to DRT consent, where the application was pending. The bank allegedly backtracked from the OTS, leading the borrower to file a writ petition before the Punjab & Haryana High Court challenging the bank's action.

## Facts

Two appeals were filed challenging the order passed by the National Company Law Tribunal, Chandigarh Bench, which admitted Section 95 applications filed by the appellants as personal guarantors. An OTS proposal was submitted by the principal borrower, approved by the bank for Rs. 7 crores, with Rs. 1.75 crores already paid. The OTS was subject to DRT consent, where the application was pending. The bank allegedly backtracked from the OTS, leading the borrower to file a writ petition before the Punjab & Haryana High Court challenging the bank's action. The High Court is currently considering the matter. The appellants argue that personal insolvency proceedings should not continue given the OTS proposal and the ongoing proceedings in the High Court. The key fact is

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## Issues and analysis

### Issue 1: Whether the initiation of personal insolvency proceedings against the appellants (personal …

**Ratio:** The liability of the personal guarantor is contingent upon the satisfaction of the debt

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**Reasoning:** The court reasoned that the issue of the OTS and its potential impact on the debt is

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**Interpretation:** The court interpreted that the personal insolvency proceedings can continue

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**Application:** The court applied the ratio to the facts by stating that since the debt is not

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** Mohit D…
- **Respondents:** Bank of Maharashtr…

## Timeline

- **2024-11-22 — Order Da…**: The NCLAT passed an order dismissing the appeals against the initiation of personal…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95 — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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