# In the matter of JM Financial Asset Reconstruction Co Ltd Vs. K G Paul, CP (IBC)/19/KOB/2021

> NCLT judgment dated 27 Sept 2021. Citation: TCN-2021-NCLT-01002. The present case involves multiple petitions filed by M/s. JM Financial Asset Reconstruction…

- **Court:** NCLT
- **Order date:** 27 Sept 2021
- **Citation:** TCN-2021-NCLT-01002
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jm-financial-asset-reconstruction-co-ltd-vs-k-g-paul-cp-95f716c3

## Summary

### Background

The present case involves multiple petitions filed by M/s. JM Financial Asset Reconstruction Company Limited (Petitioner/Creditor) against several personal guarantors of the corporate debtor, M/s. Unitek Power Solutions India Limited. The corporate debtor had availed various credit facilities from Federal Bank Limited, including Cash Credit, Bank Guarantee, and Term Loan (IPS). A significant default amount of Rs. 38,56,65,007.80/- was outstanding as of May 31, 2021, leading to the classification of the account as a Non-Performing Asset (NPA) by the bank.

…

## Facts

M/s. Unitek Power Solutions India Limited, the corporate debtor, obtained various credit facilities from Federal Bank Limited, including Cash Credit, Bank Guarantee, and Term Loan (IPS). The total amount of default stood at Rs. 38,56,65,007.80/- as of May 31, 2021. Due to the corporate debtor's failure to meet its debt obligations, the account was classified as a non-performing asset (NPA) in the bank's books, adhering to the Reserve Bank of India's guidelines.

…

## Issues and analysis

### Issue 1: Whether the applications filed by the financial creditor against the personal guarantors for…

**Ratio:** An application for initiating an insolvency resolution process against a personal…

**Reasoning:** The Tribunal reasoned that the applications were maintainable because the corporate…

**Interpretation:** The court interpreted Section 95(1) of the IBC and Rule 7(2) of the Personal…

**Application:** In this case, the corporate debtor defaulted on its loans, and the personal…

## Parties

- **Judges:** RAJESH S…; Ashok Kumar…
- **Advocates:** For Petitioner/Cre…; Shri. Sunil…; +1 more

## Timeline

- **March 26, 2013 — Assignment of Financial…**: Financial assets of the Corporate Debtor were assigned by Federal Bank Ltd. to M/s. JM…
- **January 1, 2019 — CIRP Admi…**: NCLT, Chennai, allowed the application under Section 7 of the Code, admitting CIRP…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/jm-financial-asset-reconstruction-co-ltd-vs-k-g-paul-cp-95f716c3