# In the matter of Kerala State Co-Operative Bank Ltd Vs. K. Sivadas, CP/IBC/36/KOB/2021

> NCLT judgment dated 2021-12-02. Citation: TCN-2021-NCLT-00307. The Kerala State Co-operative Bank Limited (KSCB) filed applications under Section 95(1) of the…

- **Court:** NCLT
- **Order date:** 2 Dec 2021
- **Citation:** TCN-2021-NCLT-00307
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kerala-state-co-operative-bank-ltd-vs-k-sivadas-cpibc36kob2021-dce2d0e7

## Summary

### Background

The Kerala State Co-operative Bank Limited (KSCB) filed applications 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, against Mr. Babu George and Mr. K. Sivadas, who are personal guarantors of the corporate debtor, Lake View Ayurvedic Resorts and Research Centre Private Limited. KSCB had sanctioned term loans to Lake View Ayurvedic Resorts, but the corporate debtor allegedly violated the loan terms by transferring the company to a new promoter group. KSIDC, another creditor, had previously initiated Corporate Insolvency Resolution Process (CIRP) against Lake View

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## Facts

The Kerala State Co-operative Bank Limited (KSCB) sanctioned term loans amounting to Rs. 5,90,96,000 to M/s Lake View Ayurvedic Resorts Private Limited through three loans: Rs 121 lakh on 2003-07-29, Rs 51 lakh on 2004-01-13, and Rs 418.96 lakh on 2004-12-09. These loans were secured by a pari passu agreement with KSIDC and the original title deeds were pledged with KSIDC. The project was commissioned on 2002-07-07 with Sri. Babu George as Managing Director and Dr. K. Sivadas as Director. The applicant stated that the Directors of Corporate Debtor had transferred the company to a new promoter group headed by Sri. Chandy Mathew, an Ex -NRI. KSIDC had filed an application under Section 7 of the IBC, 2016 to initiate Corporate Insolvency Resolution Process against M/s

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## Issues and analysis

### Issue 1: Whether the applications filed by The Kerala State Co-operative Bank Limited against the personal …

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the

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**Reasoning:** The Tribunal noted that the applicants complied with Section 95(4) of the IBC and that

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**Interpretation:** Section 95 provides the mechanism for creditors to initiate insolvency

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**Application:** The Tribunal found that KSCB, as the financial creditor, had complied with the

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## Parties

- **Judges:** Ashok Kumar…; Anil Ku…
- **Appellants:** The Kerala State…
- **Respondents:** M/s. Lake view…; Babu Ge…
- **Advocates:** Sunil Sh…; Akhi. S…

## Timeline

- **2002-07-07 — Project Commi…**: Lake View Ayurvedic Resorts project was commissioned with Sri. Babu George as Managing…
- **2003-07-29 — Loan Sanc…**: Rs 121 lakh loan sanctioned to…

## 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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