# In the matter of Bank of Maharashtra vs. Abhay Kumar Singh

> NCLT judgment dated 2023-07-10. Citation: TCN-2023-NCLT-02601. The Bank of Maharashtra, as a financial creditor, filed a petition under Section 95 of the IBC,…

- **Court:** NCLT
- **Order date:** 10 Jul 2023
- **Citation:** TCN-2023-NCLT-02601
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-abhay-kumar-singh-967d8a5e

## Summary

### Background

The Bank of Maharashtra, as a financial creditor, filed a petition under Section 95 of the IBC, 2016, to initiate an insolvency resolution process against Mr. Abhay Kumar Singh, a personal guarantor for M/s Hetauda Industries Pvt. Ltd., which had defaulted on a loan.

## Facts

M/s Hetauda Industries Pvt Ltd, the corporate debtor, availed a financial facility and term loan of INR 4.75 Crores from the Bank of Maharashtra in March 2015. Mr. Abhay Kumar Singh, a director of the corporate debtor, executed a guarantee agreement in his individual capacity on April 29, 2015, for these loans. The principal borrower subsequently defaulted on repayment, leading the creditor to declare the account as a Non-Performing Asset (NPA) on December 20, 2017. The Bank of Maharashtra issued a legal notice under Section 13(2) of SARFAESI recalling the loan facilities and invoking the guarantee on January 3, 2018. A demand notice was also issued on August 23, 2022, under Section 95(4)(b) of the IBC 2016 read with Rule 7(1) of the Insolvency and Bankruptcy

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## Issues and analysis

### Issue 1: Whether the petition filed under Section 95(1) of the IBC, 2016, against the personal guarantor is …

**Ratio:** A petition under Section 95(1) of the IBC, 2016, is maintainable if it is complete, the

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**Reasoning:** The NCLT found that the petition was complete in all respects, the default amount

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**Interpretation:** The court interpreted Section 95(1) and Rule 7(2) to mean that a petition is

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**Application:** The NCLT applied this interpretation by confirming that the Bank of

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## Parties

- **Judges:** P. Moha…; Satya Ranjan…
- **Appellants:** Bank of Maharashtr…
- **Respondents:** M/s Hetauda…; Abhay Kumar…
- **Advocates:** For the Petitioner…

## Timeline

- **March, 2015 — Loan ava…**: M/s Hetauda Industries Pvt Ltd availed financial facility and term loan of INR 4.75…
- **April 29, 2015 — Guarantee agreement…**: Mr. Abhay Kumar Singh executed a guarantee agreement in his individual capacity for 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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