# In the matter of Rajesh Bhatia vs. Canara Bank & Ors.

> NCLAT judgment dated 2025-04-30. Citation: TCN-2025-NCLAT-00071. The case involves two connected Company Appeals challenging the Impugned Orders passed by the…

- **Court:** NCLAT
- **Order date:** 30 Apr 2025
- **Citation:** TCN-2025-NCLAT-00071
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rajesh-bhatia-vs-canara-bank-ors-5aae8be8

## Summary

### Background

The case involves two connected Company Appeals challenging the Impugned Orders passed by the NCLT, Chennai, under Section 95(1) of the I&B Code, 2016. The Appellants, acting as personal guarantors, contested the appointment of the Resolution Professional, arguing it violated Section 97 of the I&B Code. The corporate debtor, ARS Energy Private Limited, had availed financial assistance secured by a Personal Guarantee Deed executed by the Appellants. Canara Bank, the lead bank of the consortium of banks, initiated proceedings under Section 95 of the I&B Code after the corporate debtor defaulted on loan repayments and the account was declared NPA.

## Facts

ARS Energy Private Limited (Corporate Debtor) executed a Personal Guarantee Deed on 2017-06-29 to secure financial assistance amounting to Rs.397.64 crores. This loan was availed from a consortium of banks led by Canara Bank (Respondent No.1). The total outstanding dues as of 2023-09-29 were Rs.305.22 crore. The Corporate Debtor defaulted on monthly installments, leading to the loan account being declared a Non-Performing Asset (NPA) on 2022-08-29. Canara Bank issued a demand notice under Section 13(2) of the SARFAESI Act, 2002, on 2023-09-20, and a Possession Notice on 2023-12-02. The Corporate Debtor initiated proceedings under Section 17 of the SARFAESI Act before the Debt Recovery Tribunal, challenging the possession notice. CIRP proceedings were not initiated.

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## Issues and analysis

### Issue 1: Whether the appointment of the Resolution Professional under Section 97 of the I&B Code is …

**Ratio:** The appointment of a Resolution Professional is the sole prerogative and power vested

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**Reasoning:** The Tribunal reasoned that the entire exercise of powers of appointment of a Resolution

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**Interpretation:** Section 97 of the I&B Code grants the Adjudicating Authority the power to

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**Application:** The Appellants' challenge to the appointment of the Resolution Professional was

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## Parties

- **Judges:** Sharad Kumar…; Jatindranat…
- **Appellants:** Rajesh B…
- **Respondents:** M/s. ARS Energy…; Canara…

## Timeline

- **2017-06-29 — Personal Guarantee Deed…**: M/s. ARS Energy Private Limited…
- **2022-08-29 — Loan Account Declared…**: The loan account of ARS Energy Private Limited…

## 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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