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

> NCLT judgment dated 2023-12-19. Citation: TCN-2023-NCLT-00139. 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-00139
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-baroda-vs-sarla-devi-somani-a4823958

## Summary

### Background

The Bank of Baroda filed an application to initiate the Insolvency Resolution Process against Mrs. Sarla Devi Somani, who is the personal guarantor for the loans availed by M/s Aditya Telelink Limited, the 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. Mrs. Sarla Devi Somani had executed a personal guarantee to secure the repayment of financial assistance availed by the Corporate Debtor. The Corporate Debtor defaulted in repayment, leading to the invocation of the personal guarantee.

## Facts

Bank of Baroda filed an application to initiate the Insolvency Resolution Process against Mrs. Sarla Devi Somani, the personal guarantor for M/s Aditya Telelink Limited. Mrs. Somani executed a personal guarantee to secure loans availed by Aditya Telelink. 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 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. A demand notice was issued to Mrs. Somani on 30.11.2022. The total debt was Rs. 10,73,87,620.38 as of 30.11.2022, plus future interest. Mrs. Somani defaulted on the payment, leading to

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## Issues and analysis

### Issue 1: Whether the application to initiate the Insolvency Resolution Process against the personal …

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

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**Reasoning:** The court observed that the application was filed under Section 95 of the IBC, and the

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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 Mrs. Sarla

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## Parties

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

## Timeline

- **2010-06-12 — Loan Sanc…**: Loan was sanctioned to the Corporate Debtor with a cash credit of Rs. 12 crores and a…
- **2012-04-09 — Loan Enh…**: The loan granted was enhanced to…

## 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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