# In the matter of Bank of Maharashtra Vs. B Narasimha Reddy (Elite Infra Projects Private Limited) , CP (IB)/373/95/HDB/2022

> NCLT judgment dated 2023-06-14. Citation: TCN-2023-NCLT-02948. The case involves a petition filed by Bank of Maharashtra, the Financial Creditor, under…

- **Court:** NCLT
- **Order date:** 14 Jun 2023
- **Citation:** TCN-2023-NCLT-02948
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-b-narasimha-reddy-739a6fbe

## Summary

### Background

The case involves a petition filed by Bank of Maharashtra, the Financial Creditor, 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 Debtor) Rules, 2019, seeking initiation of the Insolvency Resolution Process against Shri B. Narasimha Reddy, the Personal Guarantor of M/s. Elite Infra Projects Private Limited (Corporate Debtor). The Financial Creditor had sanctioned working capital facilities to the Corporate Debtor, which subsequently defaulted on its repayment obligations, leading to its account being declared as NPA. The Personal Guarantor had executed a Deed of Guarantee to secure the

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## Facts

Bank of Maharashtra, the Financial Creditor, filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of the Insolvency Resolution Process against Shri B. Narasimha Reddy, the Personal Guarantor of M/s. Elite Infra Projects Private Limited, the Corporate Debtor. The Financial Creditor had sanctioned working capital facilities to the Corporate Debtor, including a Cash Credit facility with a limit of Rs. 950 Lakhs. The Corporate Debtor defaulted on its repayment obligations, leading to its account being declared as NPA on 12.10.2015. The total repayments of the corporate debtor is Rs.40,48,32,021.00/-, including a principal amount of Rs. 15,28,53,834.54/- along with a total interest amount of Rs. 25,19,78,186.48/- calculated

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## Issues and analysis

### Issue 1: Whether an Insolvency Resolution Process can be ordered against the Personal Guarantor under …

**Ratio:** Section 100 of the Insolvency and Bankruptcy Code, 2016 allows for the admission of an

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**Reasoning:** The Adjudicating Authority considered the report of the Resolution Professional, which

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**Interpretation:** Section 100 of the IBC should be interpreted in a manner that promotes the

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**Application:** In this case, the Adjudicating Authority found that the Corporate Debtor had

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Bank of Maharashtr…
- **Respondents:** Elite Infra…; Shri. B Narasimha…

## Timeline

- **2014-08-14 — Deed of Guarantee…**: Personal Guarantor executed a Deed of…
- **2015-10-12 — Loan Account Declared…**: Loan account of Respondent…

## 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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