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

> NCLT judgment dated 2023-07-10. Citation: TCN-2023-NCLT-02589. The case pertains to an application filed under Section 95 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 10 Jul 2023
- **Citation:** TCN-2023-NCLT-02589
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-abhay-kumar-singh-9f625ef9

## Summary

### Background

The case pertains to an application filed under Section 95 of the Insolvency and Bankruptcy Code (IBC) 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019. Bank of Maharashtra, the financial creditor, initiated insolvency resolution process against Mr. Abhay Kumar Singh, the personal guarantor, for the loans availed by the corporate debtor, M/s Hetauda Industries Pvt. Ltd. The corporate debtor had availed financial facilities from the bank since March 2015, and Mr. Singh had executed a guarantee agreement in his individual capacity on April 29, 2015. The corporate debtor defaulted in repayment, leading to the account being declared

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## Facts

M/s Hetauda Industries Pvt Ltd, the Corporate debtor, availed financial facility and term loan from Bank of Maharashtra of INR 4.75 Crores since March of 2015. Mr. Abhay Kumar Singh, director of Corporate Debtor, executed a guarantee agreement in his individual capacity on 29th April of 2015. The principal Borrower defaulted in repayment of the dues and as a result thereof, declared Non-Performing Asset (NPA)by the creditor on 20.12.2017. The Creditor Bank of Maharashtra has issued a Legal Notice u/s 13(2) of SARFAESI recalling the loan facilities sanctioned and invoking the guarantee of the guarantor on 03.01.2018 and demand notice issued on dated 23.08.2022 as provided under Section 95(4)(b) of IBC 2016 R/W Rule 7(1) of the Insolvency and Bankruptcy Resolution

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## Issues and analysis

### Issue 1: Whether the application filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 is …

**Ratio:** Section 95 of the IBC, along with Rule 7(2) of the relevant rules, governs the

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**Reasoning:** The court reasoned that the petition was complete in all respects as it met the

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**Interpretation:** Section 95 of the IBC provides a mechanism for initiating insolvency resolution

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**Application:** The court applied the ratio to the facts of the case and found that the

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## Parties

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

## Timeline

- **2015-03-01 — Loan Ava…**: M/s Hetauda Industries Pvt Ltd availed financial facility and term loan from Bank of…
- **2015-04-29 — Guarantee Ag…**: Mr. Abhay Kumar Singh executed a guarantee…

## 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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