# In the matter of Bank of Maharashtra vs. Jayashree Suresh Nair

> NCLT judgment dated 2024-10-21. Citation: TCN-2024-NCLT-00386. The Bank of Maharashtra filed a company petition under Section 95 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 21 Oct 2024
- **Citation:** TCN-2024-NCLT-00386
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-jayashree-suresh-nair-9abe276c

## Summary

### Background

The Bank of Maharashtra filed a company petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, to initiate an insolvency resolution process against Smt. Jayashree Suresh Nair, the personal guarantor for a loan facility extended to M/s. Narayana Farm Produce Pvt. Ltd. The Corporate Debtor had approached the bank for a term loan of Rs. 70 crores and a cash credit facility of Rs. 5 crores, which the bank sanctioned on 04.10.2010. The Corporate Debtor executed demand promissory notes on 01.11.2010. The Personal Guarantor executed a Deed of Guarantee in favor of the bank on 01.11.2010. The Guarantors also created an equitable mortgage on 30.08.2011 to secure the loan facilities.

## Facts

The Bank of Maharashtra extended loan facilities to M/s. Narayana Farm Produce Pvt. Ltd. (the Corporate Debtor), for which Smt. Jayashree Suresh Nair acted as the personal guarantor. The Corporate Debtor availed a term loan of Rs. 70 crores and a cash credit facility of Rs. 5 crores, sanctioned on 04.10.2010. Demand Promissory Notes were executed on 01.11.2010. A Deed of Guarantee was executed by the Personal Guarantor on 01.11.2010. The Guarantors created an equitable mortgage on 30.08.2011. The Corporate Debtor defaulted on the loan repayment. The bank issued notices and a demand notice in Form B on 03.08.2022 for Rs. 228,48,32,932/-, which remained unpaid. The bank then filed a petition under Section 95 of the IBC to initiate insolvency resolution against the

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## Issues and analysis

### Issue 1: Whether the petition for initiating insolvency resolution process against the Personal Guarantor to …

**Ratio:** The Supreme Court in Dilip B Jiwrajka Vs. Union of India & Ors. held that no judicial

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**Reasoning:** The court relied on the Supreme Court's decision, which stated that the Resolution

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**Interpretation:** The Supreme Court's ruling clarifies that the initial stages of the insolvency

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**Application:** Based on the Supreme Court's ruling, the court determined that at this stage,

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## Parties

- **Judges:** Charanjeet Singh…; Smt Lakshmi…
- **Appellants:** Bank of Maharashtr…
- **Respondents:** M/s. Narayana…; Jayashree Suresh…

## Timeline

- **2010-10-04 — Sanction of Loan…**: The Applicant Bank sanctioned a Term Loan of Rs. 70 crores and a Cash Credit facility of…
- **2010-11-01 — Execution of Demand…**: The Corporate Debtor executed Demand…

## 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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