# In the matter of Neon Laboratories Ltd. vs. Mayank Shah & Anr.

> NCLAT judgment dated 2024-08-08. Citation: TCN-2024-NCLAT-00271. This appeal was filed by Neon Laboratories Ltd. (Operational Creditor) against an order…

- **Court:** NCLAT
- **Order date:** 8 Aug 2024
- **Citation:** TCN-2024-NCLAT-00271
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/neon-laboratories-ltd-vs-mayank-shah-anr-ceefc5fe

## Summary

### Background

This appeal was filed by Neon Laboratories Ltd. (Operational Creditor) against an order passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench). The Adjudicating Authority had disposed of an application filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, by Mr. Mayank Shah (Intervenor) in a Corporate Insolvency Resolution Process (CIRP) initiated by the Operational Creditor. The Adjudicating Authority also dismissed CP (IB) No. 794 of 2022 and imposed costs on the Appellant, finding collusion with the Corporate Debtor to thwart proceedings before the Bombay High Court. The case involves a deed of personal guarantee dated 27.07.2011 between the Appellant (Lender), Satra Properties (India) Ltd. (SPIL) (Borrower), and Praful

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## Facts

A personal guarantee deed was executed on 27.07.2011 between Neon Laboratories Ltd. (Appellant/Lender), Satra Properties (India) Ltd. (SPIL) (Borrower), and Praful Nanji Satra (Respondent No. 2/Guarantor). Clause 3 of the agreement stipulated that the Guarantor would pay the lender Rs. 1.75 crore within 60 days of the demand notice. Mr. Mayank Shah (Respondent No. 1) filed an Arbitration Petition No. 304 of 2021 before the Bombay High Court under Section 9 of the Arbitration and Conciliation Act, 1996, for depositing Rs. 131,02,82,634/-. The Appellant served a demand notice on Respondent No. 2 on 01.11.2021 and filed a petition under Section 95 of the Code on 01.12.2021. The Adjudicating Authority found that the demand notice was served on 01.11.2021, and the petition

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## Issues and analysis

### Issue 1: Whether the petition filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 by the …

**Ratio:** The terms of the personal guarantee agreement stipulate a 60-day period for the guarantor

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**Reasoning:** The court reasoned that the agreement between the parties specifically provided a 60-day

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**Interpretation:** Section 95 of the Code should be interpreted in conjunction with the specific

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**Application:** In this case, the demand notice was issued on 01.11.2021, and the petition

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## Parties

- **Judges:** Rakesh Kuma…; Indevar P…
- **Appellants:** Neon Laboratories…
- **Respondents:** Praful Nanj…; Mayank…

## Timeline

- **2011-07-27 — Execution of Personal…**: A personal guarantee deed was executed between Neon Laboratories Ltd., Satra Properties…
- **2020-08-03 — CIRP Init…**: CIRP proceedings against Satra Properties (India) Ltd. were initiated by Vistra ITCL…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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