# In the matter of Union Bank of India Vs. Mr. Sachin Garg, CP No. IB-343 (PB)/ 2021

> NCLT judgment dated 2021-09-09. Citation: TCN-2021-NCLT-01140. The case involves an application filed by Union Bank of India, the Financial Creditor, under…

- **Court:** NCLT
- **Order date:** 9 Sept 2021
- **Citation:** TCN-2021-NCLT-01140
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/union-bank-of-india-vs-mr-sachin-garg-cp-no-ib-343-fafb3a88

## Summary

### Background

The case involves an application filed by Union Bank of India, the Financial Creditor, under Section 95 of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Mr. Sachin Garg, the Personal Guarantor to the Corporate Debtor, M/s. S L Consumer Products Limited. The application pertains to an outstanding debt of Rs. 76.48 crores as of 21.09.2020, which is due from the Corporate Debtor. The bank had been dealing with the Corporate Debtor since 1999, providing credit and working capital facilities. The Corporate Debtor defaulted in repayment, leading to the account being declared NPA on 30.04.2017. The bank invoked the personal guarantee and issued a demand notice to Mr. Sachin Garg.

## Facts

Union Bank of India (UBI) extended credit facilities to M/s. S L Consumer Products Limited (Corporate Debtor or CD). Mr. Sachin Garg acted as the personal guarantor for the CD's debt. The CD defaulted on its repayment obligations, leading UBI to declare the account as Non-Performing Asset (NPA) on 30.04.2017. UBI issued a notice dated 25.07.2021 to the borrower and the respondent under section 13(2) of the SARFAESI Act, 2002, seeking repayment of outstanding debt of Rs. 56.04 crores as on 30.04.2017. The CD was admitted into Corporate Insolvency Resolution Process (CIRP) by NCLT, New Delhi, vide order dated 10.07.2019. UBI invoked the personal guarantee of Mr. Sachin Garg via notice dated 21.09.2020. UBI filed an application under Section 95 of the Insolvency and

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## Issues and analysis

### Issue 1: Whether the application filed by Union Bank of India under Section 95 of the Insolvency and …

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The court considered the provisions of Section 95 of the IBC, which explicitly provides

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**Interpretation:** Section 95 provides a mechanism for financial creditors to recover debts from

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**Application:** The court applied Section 95 to the case, finding that Union Bank of India, as

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## Parties

- **Judges:** Shri. Bhaskara…; SHRI. HEMANT…
- **Appellants:** Union Bank of…
- **Respondents:** M/s. S L Consumer…; Sachin…

## Timeline

- **1999-01-01 — Applicant dealing with…**: The Applicant Bank has been dealing with CD since 1999, for provision of credit and…
- **2013-03-08 — Sanction…**: The CD, through its guarantor, approached the Applicant for sanction of credit…

## 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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