# In the matter of Bank of Baroda vs. Sanjay Somani

> NCLT judgment dated 2023-12-19. Citation: TCN-2023-NCLT-00155. The Bank of Baroda filed an application to initiate the Insolvency Resolution Process against…

- **Court:** NCLT
- **Order date:** 19 Dec 2023
- **Citation:** TCN-2023-NCLT-00155
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-baroda-vs-sanjay-somani-dd6f4c62

## Summary

### Background

The Bank of Baroda filed an application to initiate the Insolvency Resolution Process against Mr. Sanjay Somani, who is the personal guarantor for M/s Aditya Telelink Limited (Corporate Debtor). The application was filed under Section 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the relevant rules. Mr. Somani had provided a personal guarantee to secure loans availed by the Corporate Debtor.

## Facts

The Bank of Baroda (Applicant/Creditor) filed an application to initiate the Insolvency Resolution Process against Mr. Sanjay Somani (Personal Guarantor/Respondent) for M/s Aditya Telelink Limited (Corporate Debtor). Mr. Somani provided a personal guarantee for loans availed by the Corporate Debtor. The loan was sanctioned on 2010-06-12, with a cash credit of Rs. 12 crores and a bank guarantee of Rs. 3 crores, totaling Rs. 15 crores. The General Form of Guarantee was executed on 2010-06-12 by Mr. Sanjay Somani. On 2012-04-09, the loan was enhanced to Rs. 18 crores. The credit facility was renewed, and the Corporate Debtor acknowledged the loan on 2016-05-16. The loan account was classified as a Non-Performing Asset on 2016-09-28. A Recovery Certificate was issued on

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## Issues and analysis

### Issue 1: Whether the application to initiate Insolvency Resolution Process against the Personal Guarantor, …

**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 provides a mechanism for creditors to recover debts from personal

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**Application:** The court applied Section 95 and the relevant rules to the facts of the case,

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** Bank of B…
- **Respondents:** M/s Aditya…; SANJAY S…

## Timeline

- **2010-06-12 — Loan Sanc…**: Loan sanctioned to the Corporate Debtor with a cash credit of Rs. 12 crores and a bank…
- **2010-06-12 — General Form of…**: The General Form of Guarantee was executed by Mr. Sanjay Somani in favor of the Applicant…

## 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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