# In the matter of Piramal Capital & Housing Finance Ltd Vs. Mr. Babu A Dhammanagi, CP (IB) No. 58/BB/2021

> NCLT judgment dated 2021-11-11. Citation: TCN-2021-NCLT-00528. The case involves an application filed by Piramal Capital and Housing Finance Limited…

- **Court:** NCLT
- **Order date:** 11 Nov 2021
- **Citation:** TCN-2021-NCLT-00528
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/piramal-capital-housing-finance-ltd-vs-mr-babu-a-dhammanagi-cp-752b420e

## Summary

### Background

The case involves an application filed by Piramal Capital and Housing Finance Limited (Financial Creditor) under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 7(2) of the I&B (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Mr. Babu A. Dhammangi, the personal guarantor to the corporate debtor, Dhammangi Developers Private Limited. The application arises from a default on a loan agreement between Dhammangi Developers Private Limited and Piramal Enterprises Limited, which was later assigned to Piramal Capital and Housing Finance Limited. The financial creditor extended financial

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## Facts

1. Piramal Capital and Housing Finance Limited (Financial Creditor) filed an application under Section 95(1) of the IBC against Mr. Babu A. Dhammangi (Personal Guarantor) for initiating the insolvency resolution process.
2. The application is based on a default in a loan agreement between Dhammangi Developers Private Limited (Corporate Debtor) and Piramal Enterprises Limited, later assigned to the Financial Creditor.
3. The Financial Creditor extended financial assistance of Rs. 70 crores to the Corporate Debtor.
4. The Corporate Debtor defaulted on its payment obligations, leading the Financial Creditor to issue notices dated 10th July 2018 and 29th October 2020, recalling the loan.
5. The Security Trustee also issued a notice to the Personal Guarantor on 6th November

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 95(1) of the IBC for …

**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 provisions of Section 95(1) of the IBC and the related rules,

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**Interpretation:** Section 95(1) provides a mechanism for creditors to recover debts from personal

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**Application:** The court applied Section 95(1) to the facts of the case, noting that the

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## Parties

- **Judges:** Ajay Kumar…; Manoj Kumar…
- **Appellants:** M/s. Piramal…
- **Respondents:** M/s. Dhammangi…; Babu A. Dha…
- **Advocates:** Prashant…; Bhaskar Subramania…

## Timeline

- **2016-05-27 — Inter Corporate Deposit…**: An Inter Corporate Deposit Agreement (ICD) was executed between Dhammangi Developers…
- **2016-09-22 — Assignment Ag…**: The ICD was transferred to Piramal Capital and Housing Finance Limited via an assignment…

## 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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