# In the matter of Bank of Maharashtra vs. Kavita Ninad Mestry

> NCLT judgment dated 2025-03-11. Citation: TCN-2025-NCLT-00375. Bank of Maharashtra filed an application under Section 95(1) and Section 60(2) of the…

- **Court:** NCLT
- **Order date:** 11 Mar 2025
- **Citation:** TCN-2025-NCLT-00375
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-kavita-ninad-mestry-b73de7da

## Summary

### Background

Bank of Maharashtra filed an application under Section 95(1) and Section 60(2) of the Insolvency and Bankruptcy Code, 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, seeking initiation of insolvency resolution process against Mrs. Kavita Ninad Mestry, the personal guarantor to M/s Autocrat Automotive Stamping Private Limited, the Corporate Debtor. The Corporate Debtor had availed a Term Loan facility of Rs.3.75 Crore and a Cash Credit Facility of Rs.1.25 Crore from the Financial Creditor in 2013. The Respondent, being a director of the Corporate Debtor, provided a personal guarantee against the credit facility. The Corporate

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## Facts

The Bank of Maharashtra extended credit facilities to Autocrat Automotive Stamping Private Limited, the Corporate Debtor, including a Term Loan of Rs.3.75 Crore and a Cash Credit Facility of Rs.1.25 Crore in 2013. Mrs. Kavita Ninad Mestry, a director of the Corporate Debtor, provided a personal guarantee for these facilities. The Corporate Debtor defaulted on its repayment obligations, leading to its account being classified as a Non-Performing Asset (NPA) on 12.05.2014. The Financial Creditor issued a demand notice under Section 13(2) of the SARFAESI Act on 17.05.2018 to the Corporate Debtor and its directors, including Mrs. Mestry. Subsequently, a Demand Notice in Form B was issued to Mrs. Mestry on 03.11.2022 under Rule 7(1) of the PG to CD Rules. The total

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## Issues and analysis

### Issue 1: Whether the application under Section 95 of the IBC …

**Ratio:** The pre-requisite for triggering CIRP under Section 95 of the Code is the occurrence of

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**Reasoning:** The court reasoned that the Financial Creditor failed to demonstrate that the guarantee

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**Interpretation:** The court interpreted that a demand notice under Rule 7(1) of the PG to CD

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**Application:** Since the Financial Creditor failed to prove that the guarantee was invoked,

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** Bank of Maharashtr…
- **Respondents:** Autocrat Automotiv…; KAVITA NINAD…
- **Advocates:** Meet Pa…; Kartikee Korgaonka…

## Timeline

- **2013-01-01 — Loan Facility…**: The Corporate Debtor availed Term Loan and Cash Credit Facility from the Financial…
- **2013-03-14 — Guarantee Ag…**: The Respondent provided a personal…

## 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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