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

> NCLT judgment dated 2021-09-27. Citation: TCN-2021-NCLT-00999. The case involves multiple petitions (CP(IBC)/13/KOB/2021 to CP(IBC)/19/KOB/2021) filed by JM…

- **Court:** NCLT
- **Order date:** 27 Sept 2021
- **Citation:** TCN-2021-NCLT-00999
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jm-financial-asset-reconstruction-co-ltd-vs-k-g-paul-cp-9721e1a0

## Summary

### Background

The case involves multiple petitions (CP(IBC)/13/KOB/2021 to CP(IBC)/19/KOB/2021) filed by JM Financial Asset Reconstruction Company Limited 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 Debtors) Rules, 2019. These petitions seek to initiate the Insolvency Resolution Process against personal guarantors of the corporate debtor, M/s. Unitek Power Solutions India Limited. The corporate debtor had availed credit facilities from the Federal Bank Limited and defaulted on its debt obligations, leading to its account being classified as a non-performing asset. The financial facilities were secured

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## Facts

M/s. JM Financial Asset Reconstruction Company Limited filed petitions under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against personal guarantors of M/s. Unitek Power Solutions India Limited, the corporate debtor. The corporate debtor availed credit facilities from the Federal Bank Limited, including Cash Credit, Bank Guarantee, and Term Loan (IPS). The amount of default was Rs. 38,56,65,007.80 as of 31.05.2021. The corporate debtor failed to meet its debt obligations, leading to its classification as a non-performing asset (NPA) as per Reserve Bank of India guidelines. The loans were secured by a charge over properties belonging to the guarantors/co-obligators. The respondents, being personal guarantors, undertook to unconditionally and irrevocably

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## Issues and analysis

### Issue 1: Whether the Petitioners have complied with Section 95(4) of the I&B Code regarding demand …

**Ratio:** Section 95(4) of the I&B Code specifies the requirements for an application for

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**Reasoning:** The Tribunal examined the records and found that demand notices dated 14.02.2020 were

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**Interpretation:** Section 95(4) mandates that creditors must provide details of the debt,

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**Application:** The Tribunal found that the demand notices were indeed sent, satisfying the

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## Parties

- **Judges:** RAJESH S…; Ashok Kumar…
- **Appellants:** M/s. JM Financial…
- **Respondents:** M/s. Unitek Power…; Reena…
- **Advocates:** Sunil Sh…; Akhil S…

## Timeline

- **2013-03-26 — Assignment Ag…**: Registered assignment Agreement dated 26.03.2013, the financial assets of Corporate…
- **2019-01-01 — CIRP Admi…**: The Tribunal allowed the application by order dated 01.01.2019, admitting the 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)

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