# In the matter of Indian Bank Vs. Varez Karsi Dadina, CP (IB) No. 116/(KB)/2021

> NCLT judgment dated 2021-09-07. Citation: TCN-2021-NCLT-01169. The case involves an application filed by Indian Bank under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 7 Sept 2021
- **Citation:** TCN-2021-NCLT-01169
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/indian-bank-vs-varez-karsi-dadina-cp-f0df256f

## Summary

### Background

The case involves an application filed by Indian Bank under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019 and Regulation 4(2) of IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, to initiate the Insolvency Resolution Process against the personal guarantor, Ms. Varez Karsi Dadina, a director of KND Engineering Technologies Limited. KND Engineering Technologies Limited had credit facilities with Indian Bank, which were classified as NPA due to failure to comply with loan terms. An earlier CIRP against KND Engineering

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## Facts

Indian Bank, a body corporate, extended credit facilities to KND Engineering Technologies Limited, with a sanction limit of Rs. 55.00 crores around 2010. The credit facility was enhanced over time, and as of 2020-10-13, the outstanding debt and uncharged interest amounted to Rs.62,03,13,655.62. Ms. Varez Karsi Dadina, a director of KND Engineering Technologies Limited, provided a personal guarantee to secure the loan. KND Engineering Technologies Limited failed to meet its interest obligations, leading to the loan accounts being classified as NPA on 2018-05-02. An earlier CIRP against KND Engineering Technologies Limited was initiated by an operational creditor, Subrata Sarkar, and a resolution plan was approved on 2019-06-04. Indian Bank served a notice in Form B on

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## Issues and analysis

### Issue 1: Whether the application filed by Indian Bank under Section 95(1) of the IBC for initiating the …

**Ratio:** Section 95(1) of the IBC allows a creditor to apply for initiating the Insolvency

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**Reasoning:** The court considered the application filed by Indian Bank, along with the supporting

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**Interpretation:** Section 95(1) provides a mechanism for creditors to pursue insolvency

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**Application:** The court found that Indian Bank had presented sufficient evidence to

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** Indian…
- **Respondents:** KND Engineering…; Varez Karsi…

## Timeline

- **2010-01-01 — Credit Facility…**: Indian Bank sanctioned a credit facility of Rs. 55.00 crores to KND Engineering…
- **2018-05-02 — Loan Account Classified…**: The loan accounts of KND Engineering Technologies Limited were classified as…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95(1) — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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