# In the matter of Bank of Maharashtra vs. Bal Kishan Gupta

> NCLT judgment dated 2024-09-24. Citation: TCN-2024-NCLT-00559. Bank of Maharashtra filed an application under Section 95 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 24 Sept 2024
- **Citation:** TCN-2024-NCLT-00559
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-bal-kishan-gupta-96ca1410

## Summary

### Background

Bank of Maharashtra filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Mr. Bal Kishan Gupta, the personal guarantor, for loans availed by M/s Maa Santoshi Marble Pvt. Ltd. The corporate debtor had approached the bank in 2013 for credit facilities, which were sanctioned. Mr. Bal Kishan Gupta stood as the personal guarantor and executed a deed of guarantee on 24.12.2014. The corporate debtor defaulted, leading to the account being declared NPA on 24.09.2015. The bank issued recall and demand notices, which remained uncomplied with. The bank also filed an Original Application before DRT-I, Delhi, to recover the outstanding amount.

## Facts

In 2013, M/s Pushpa Minerals, later taken over by M/s Maa Santoshi Marble Pvt. Ltd. (Corporate Debtor), approached Bank of Maharashtra for credit facilities. The bank sanctioned a credit facility of Rs. 4.75 crores on 11.03.2013, reviewed on 19.09.2013, and extended non-funded limits for 3 Bank Guarantees of Rs. 1 Crore each. The full credit facility of Rs. 7.75 Crores was transferred to the Corporate Debtor on 24.12.2014. Mr. Bal Kishan Gupta stood as the Personal Guarantor and executed a deed of guarantee on 24.12.2014. The credit facilities were secured by creating primary security in the form of stocks and receivables and equitable mortgage properties. The Corporate Debtor defaulted in payment, and the account was declared NPA on 24.09.2015. The bank issued a

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## Issues and analysis

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

**Ratio:** The Hon'ble Supreme Court in Dilip B. Jiwrajka v. Union of India (2024) 5 SCC 435 upheld

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**Reasoning:** The Adjudicating Authority relied on the judgments of the Hon'ble Supreme Court and

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**Interpretation:** The interpretation of Section 95 in conjunction with Sections 97 and 100 of the

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**Application:** In this case, the Adjudicating Authority decided to proceed with the

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** Bank of Maharashtr…
- **Respondents:** M/s Maa Santoshi…; BAL KISHAN…
- **Advocates:** Animesh Kha…; Karan Prata…

## Timeline

- **2013-03-11 — Credit Facility…**: Applicant sanctioned a credit…
- **2013-09-19 — Facility…**: The aforementioned facility was further reviewed and the Applicant Bank also extended…

## 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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