# In the matter of Bank of Baroda vs. Jai Kumar Somani

> NCLT judgment dated 2023-12-19. Citation: TCN-2023-NCLT-00142. Bank of Baroda filed an application under Section 95 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 19 Dec 2023
- **Citation:** TCN-2023-NCLT-00142
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-baroda-vs-jai-kumar-somani-a86e9583

## Summary

### Background

Bank of Baroda filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against Mr. Jai Kumar Somani, the Personal Guarantor of M/s Aditya Telelink Limited. The application was filed due to the Corporate Debtor's default in repaying loans for which Mr. Somani had provided a personal guarantee. The loan was sanctioned on 12.06.2010, with subsequent enhancements. The Corporate Debtor's account was classified as a Non-Performing Asset on 28.09.2016. A Recovery Certificate was issued by the Debt Recovery Tribunal on 07.12.2021, but the debt remained unpaid.

## Facts

Bank of Baroda ('Creditor'/'Applicant') filed an application to initiate Insolvency Resolution Process against Mr. Jai Kumar Somani ('Personal Guarantor'/'Respondent'). Mr. Somani stood as the Guarantor for loans availed by M/s Aditya Telelink Limited ('Corporate Debtor'). The loan was sanctioned on 12.06.2010, with Cash Credit of Rs. 12 crores and Bank Guarantee of Rs. 3 crores, totaling Rs. 15 crores. The General Form of Guarantee was executed on 12.06.2010 by Mr. Somani. On 09.04.2012, the loan was enhanced to Rs. 18 crores. The credit facility was renewed, and on 16.05.2016, the Corporate Debtor acknowledged the loan. On 28.09.2016, the loan account was classified as Non-Performing Asset. A Recovery Certificate was issued on 07.12.2021. A demand notice was issued

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## Issues and analysis

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

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

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**Reasoning:** The court observed that the Personal Guarantor had defaulted in payment of the dues

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**Interpretation:** Section 95 allows a creditor to initiate insolvency proceedings against a

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**Application:** The court applied Section 95 to the facts, noting that Mr. Somani, as the

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** Bank of B…
- **Respondents:** Aditya Telelink…; JAI KUMAR…

## Timeline

- **2010-06-12 — Loan Sanc…**: Loan sanctioned to Corporate Debtor with Cash Credit of Rs. 12 crores and Bank Guarantee…
- **2010-06-12 — General Form of…**: Mr. Jai Kumar Somani executed…

## 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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