# In the matter of Suresh Kumar and Ors. vs. Central Bank of India

> NCLAT judgment dated 2024-11-27. Citation: TCN-2024-NCLAT-00060. This case involves an appeal against an order dated 01.07.2024 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 27 Nov 2024
- **Citation:** TCN-2024-NCLAT-00060
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/suresh-kumar-and-ors-vs-central-bank-of-india-b686083b

## Summary

### Background

This case involves an appeal against an order dated 01.07.2024 passed by the Adjudicating Authority (National Company Law Tribunal, Chandigarh Bench) in I.A. No. 294/2020 in C.P. (IB) No. 629/Chd/Hp/2019. The I.A. was filed by the Central Bank of India, the respondent, and allowed for the reconstitution of the Committee of Creditors (CoC) by excluding the appellants. The appellants, who are personal guarantors to a loan taken by the Corporate Debtor, M/s. Ram Hari Auto Private Ltd., were initially included in the CoC by the Interim Resolution Professional (IRP), but the Adjudicating Authority excluded them because they had not made any payment to the creditor.

## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against M/s. Ram Hari Auto Private Ltd. based on an application by an Operational Creditor, with an order dated 14.02.2020. A public announcement was made on 17.02.2020, setting 02.03.2020 as the last date for claim submissions. The Interim Resolution Professional (IRP) formed a CoC consisting only of Unsecured Financial Creditors and held the first CoC meeting on 16.03.2020. The Central Bank of India filed a claim for ₹12,15,30,369 as a Secured Creditor on 09.03.2020. The IRP informed the Central Bank of India on 19.03.2020 about the admission of its claim and eligibility to be a member of the CoC. The second CoC meeting was convened on 28.05.2020, where the Central Bank of India was informed that its

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## Issues and analysis

### Issue 1: Whether personal guarantors, who have not made any payment towards the guaranteed debt, can be …

**Ratio:** A guarantee given by a guarantor, plain and simple, cannot be the basis for a financial

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**Reasoning:** The court reasoned that the statutory scheme of the IBC requires that for a transaction

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**Interpretation:** Section 5(8)(i) of the IBC defines financial debt to include the amount of any

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**Application:** In this case, the Appellants, as personal guarantors, had not made any payment

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** Suresh…
- **Respondents:** M/s Ram Hari Auto…; Central Bank of…
- **Advocates:** Mrinal Harsh…; Iswar Moh…; +9 more

## Timeline

- **2020-02-14 — CIRP Commen…**: Corporate Insolvency Resolution Process (CIRP) against M/s. Ram Hari Auto Private Ltd.…
- **2020-02-17 — Public Annou…**: Public announcement was made, with 02.03.2020…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 140 — Disqualification of bankrupt](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-140)

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