# In the matter of JM Financial Asset Reconstruction Co Ltd Vs. Susan Zachariah, CP (IBC)/14/KOB/2021

> NCLT judgment dated 2021-09-27. Citation: TCN-2021-NCLT-01003. The National Company Law Tribunal (NCLT), Kochi Bench, Kerala, heard a batch of petitions…

- **Court:** NCLT
- **Order date:** 27 Sept 2021
- **Citation:** TCN-2021-NCLT-01003
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jm-financial-asset-reconstruction-co-ltd-vs-susan-zachariah-cp-a8857cf2

## Summary

### Background

The National Company Law Tribunal (NCLT), Kochi Bench, Kerala, heard a batch of petitions (CP(IBC)/13/KOB/2021 to CP(IBC)/19/KOB/2021) filed 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 were filed by JM Financial Asset Reconstruction Company Limited against various personal guarantors of the corporate debtor, M/s. Unitek Power Solutions India Limited, seeking to initiate the Insolvency Resolution Process. The corporate debtor had availed credit facilities from the Federal Bank Limited and defaulted on its obligations, leading to its account being

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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 several personal guarantors (Mrs. Reena Paul, Mrs. Susan Zachariah, Mr. John Zachariah, Mrs. Annu Mathew, Mr. Mathew John, Mr. Korah John, and Mr. K.G. Paul) of the Corporate Debtor, M/s. Unitek Power Solutions India Limited. The Corporate Debtor had availed credit facilities (Cash Credit, Bank Guarantee, Term Loan) from the Federal Bank Limited, resulting in a default of Rs. 38,56,65,007.80 as of 31.05.2021. The account was classified as a non-performing asset (NPA) according to Reserve Bank of India guidelines. The loans were secured by a charge over properties belonging to the guarantors. The guarantors had undertaken to

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## Issues and analysis

### Issue 1: Whether the petitions filed under Section 95 of the Insolvency and Bankruptcy Code, 2016, read with …

**Ratio:** Section 95(1) of the Insolvency and Bankruptcy Code, 2016, allows a creditor to apply

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**Reasoning:** The NCLT considered the provisions of Section 95 of the IBC, 2016, and Rule 7(2) of the

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**Interpretation:** Section 95(1) of the IBC, 2016, provides a mechanism for creditors to initiate

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**Application:** The NCLT found that the petitions were filed in accordance with Section 95(1)

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## Parties

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

## Timeline

- **2013-03-26 — Assignment Ag…**: Financial assets of Corporate Debtor…
- **2019-01-01 — CIRP Admi…**: Tribunal allowed application 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)

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