# In the matter of Bank of Maharashtra vs. Ashwani Khanna

> NCLT judgment dated 2024-02-28. Citation: TCN-2024-NCLT-02345. The application was filed by Bank of Maharashtra under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 28 Feb 2024
- **Citation:** TCN-2024-NCLT-02345
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-ashwani-khanna-720e7aa4

## Summary

### Background

The application was filed by Bank of Maharashtra under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, read with Rule 7 of the Insolvency and Bankruptcy Rules, 2019, against Mr. Ashwani Khanna, the Personal Guarantor to the Corporate Debtor, M/s. Ashoka Machine Tools International Pvt. Ltd. The bank sought initiation of the insolvency resolution process against the personal guarantor due to default in repayment of loan facilities granted to the corporate debtor.

## Facts

Bank of Maharashtra filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against Mr. Ashwani Khanna, who is the personal guarantor for M/s. Ashoka Machine Tools International Pvt. Ltd. The bank had granted Cash Credit and Bank Guarantee facilities to Ashoka Machine Tools International Pvt. Ltd. The Applicant Bank had sanctioned a Cash Credit Hypothecation facility of Rs. 725.00 lakh with a Sub-limit facility of Packing Credit of Rs. 100.00 lakh to meet the Working Capital needs of the Corporate Debtor. The Cash Credit limit carried interest @ Base Rate plus 3.5% i.e. 13.50% per annum with monthly rests subject to change from time to time and a Bank Guarantee Limit of Rs. 75.00 Lakh. The Principal Borrower had requested the Applicant

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## Issues and analysis

### Issue 1: Whether the application filed by Bank of Maharashtra under Section 95(1) of the Insolvency and …

**Ratio:** Section 95(1) of the Insolvency and Bankruptcy Code, 2016, allows a creditor to file an

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**Reasoning:** The Adjudicating Authority considered the Resolution Professional's report, which stated

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**Interpretation:** Section 95(1) provides a mechanism for creditors to recover their dues from

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**Application:** The Adjudicating Authority found that the application met the requirements of

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** Bank of Maharashtr…
- **Respondents:** Ashoka Machine…; ASHWANI K…

## Timeline

- **2013-01-22 — Mortgagor's De…**: Mortgagor's Declaration dated 22.01.2013 for the Equitable Mortgage by deposit of title…
- **2013-01-24 — Memorandum of Record of…**: Memorandum of Record of Deposit of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95(1) — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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