# In the matter of Bank of Baroda vs Sarla Devi Somani

> NCLT judgment dated 2023-12-19. Citation: TCN-2023-NCLT-00125. 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-00125
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-baroda-vs-sarla-devi-somani-73406e7c

## Summary

### Background

Bank of Baroda filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Mrs. Sarla Devi Somani, the personal guarantor to the loans availed by M/s Aditya Telelink Limited, the Corporate Debtor. The loan was sanctioned on 12.06.2010, with a cash credit of Rs. 12 crores and a bank guarantee of Rs. 3 crores, totaling Rs. 15 crores. The loan was enhanced to Rs. 18 crores on 09.04.2012. The loan account of the Corporate Debtor was classified as a Non-Performing Asset on 28.09.2016. A Recovery Certificate was issued by the Debt Recovery Tribunal, Jaipur, on 07.12.2021, in favor of the Applicant Bank. A demand notice dated 30.11.2022 was issued to the Personal Guarantor.

## Facts

Bank of Baroda ('Creditor'/'Applicant') filed an application to initiate Insolvency Resolution Process against Mrs. Sarla Devi Somani ('Personal Guarantor'/'Respondent'). Mrs. Somani is the personal guarantor for loans availed by M/s Aditya Telelink Limited ('Corporate Debtor'). The loan was sanctioned on 12.06.2010, comprising a cash credit of Rs. 12 crores and a bank guarantee of Rs. 3 crores, totaling Rs. 15 crores. The loan was later enhanced to Rs. 18 crores on 09.04.2012. 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, Jaipur, on 07.12.2021. A demand notice was issued to Mrs. Somani on 30.11.2022, demanding Rs. 10,73,87,620.38/- as of 30.11.2022, plus future

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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, allows a creditor to initiate the

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**Reasoning:** The court considered the provisions of Section 95 of the IBC and the relevant rules. It

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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 to the facts of the case, noting that Bank of

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** Bank of B…
- **Respondents:** Aditya Telelink…; SARLA DEVI…
- **Advocates:** Anubha…; Shashank Bh…

## Timeline

- **2010-06-12 — Loan Sanc…**: Loan sanctioned to Corporate Debtor with Cash Credit of Rs. 12 crores and Bank Guarantee…
- **2012-04-09 — Loan Enh…**: Loan granted was enhanced to the…

## 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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