# In the matter of Bank of Baroda Vs. Sujhatha Chandra Nadimpalli, CP (IB) No. 61/95/AMR/2022

> NCLT judgment dated 2022-07-04. Citation: TCN-2022-NCLT-01897. The case involves an application filed by Bank of Baroda (Financial Creditor) against Smt.…

- **Court:** NCLT
- **Order date:** 4 Jul 2022
- **Citation:** TCN-2022-NCLT-01897
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-baroda-vs-sujhatha-chandra-nadimpalli-cp-1a3f9f33

## Summary

### Background

The case involves an application filed by Bank of Baroda (Financial Creditor) against Smt. Sujatha Chandra Nadimpalli (Personal Guarantor/Respondent No.1) and M/s. Veda Biofuel Limited (Corporate Debtor/Respondent No.2) under Section 95 read with Section 60(2) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The application pertains to the insolvency process for personal guarantors to corporate debtors. The Corporate Debtor availed credit facilities, including a term loan and working capital, but defaulted on repayments. The Personal Guarantor provided guarantees for these facilities. The bank initiated proceedings under SARFAESI Act and also filed a Company Petition under Section 9 of IBC, which was

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## Facts

M/s. Veda Biofuel Limited (Corporate Debtor/Respondent No.2) availed Rs.24.00 Crores via a sanction letter dated 2014-01-02 for establishing a 2.3 MW Co-Generation Power Plant. A consortium of banks, led by Bank of Baroda (Petitioner), sanctioned an additional Term Loan II of Rs.13,30,00,000/- and working capital of Rs.14,00,00,000/-, with the Petitioner's share being Rs.5 Crores in Term Loan II and Rs.8 Crores in working capital. Necessary documentation was executed on 2014-07-03 and 2015-12-18. Respondent No.2 executed a deed of Hypothecation on 2014-07-03 and 2015-12-18. Smt. Sujatha Chandra Nadimpalli (Personal Guarantor/Respondent No.1) stood as a Personal Guarantor for the credit facilities and executed Personal Guarantee Deeds guaranteeing payment of

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## Issues and analysis

### Issue 1: Whether the application filed by the Bank of Baroda against the Personal Guarantor and Corporate …

**Ratio:** Section 95 of the IBC allows a creditor to initiate insolvency resolution process against

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

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**Interpretation:** Section 95 of IBC provides a mechanism for creditors to initiate insolvency

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**Application:** The court applied this principle by considering the application as primarily

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Bank of B…
- **Respondents:** M/s Veda Biofuel…; Smt.Sujatha…

## Timeline

- **2014-01-02 — Sanction…**: Corporate Debtor availed Rs.24.00 Crores vide sanction letter for establishing a 2.3 MW…
- **2014-07-03 — Documentation…**: Respondents 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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