# In the matter of Bank of Maharashtra Vs. Manda Venkata Mahalakshmi, CP(IB)/173/95/HDB/2022

> NCLT judgment dated 2023-03-31. Citation: TCN-2023-NCLT-03919. The Bank of Maharashtra filed a petition under Section 95 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 31 Mar 2023
- **Citation:** TCN-2023-NCLT-03919
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-manda-venkata-mahalakshmi-cp-6c9e3d5b

## Summary

### Background

The Bank of Maharashtra filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Insolvency Resolution Process against Smt. Manda Venkata Mahalakshmi, the personal guarantor of SV SVS Projects Private Limited (Corporate Debtor). The Corporate Debtor had availed working capital facilities from the bank, and upon default, the account was declared NPA. The Financial Creditor issued a demand notice to the Personal Guarantor, who failed to pay the outstanding amount. The Resolution Professional recommended the admission of the petition.

## Facts

Bank of Maharashtra filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, against Smt. Manda Venkata Mahalakshmi, the personal guarantor of SV SVS Projects Private Limited. The corporate debtor had availed working capital facilities consisting of Cash Credit and Bank Guarantee Facilities aggregating to Rs. 50.50 Crores. The corporate debtor defaulted on its obligations, leading to the loan account being declared as NPA on 27.12.2018. The total principal amount of default was Rs. 32,30,71,217.76 along with an interest amount of Rs. 15,72,26,350.93 calculated until 17.05.2022. The Financial Creditor issued a Form B Demand Notice dated 31.07.2021 to the Personal Guarantor, requesting payment. The Personal Guarantor failed to pay the outstanding

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## Issues and analysis

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

**Ratio:** The Insolvency and Bankruptcy Code, 2016, along with the Personal Guarantors Insolvency

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**Reasoning:** The Tribunal considered the report of the Resolution Professional, which recommended the

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**Interpretation:** Section 100 of the IBC, 2016 allows for the initiation of the Insolvency

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**Application:** Given that the Financial Creditor followed the necessary procedures, including

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Bank of Mah…
- **Respondents:** SV SVS Projects…; Smt.Manda Venkata…
- **Advocates:** Aishwarya…; S.V. Rama K…; +2 more

## Timeline

- **2014-03-24 — Sanction…**: Date of one of the sanction letters for the working capital facilities availed by the…
- **2014-03-25 — Deed of Gua…**: Execution of Deed of Guarantee by the Corporate Debtor and Personal Guarantor to secure…

## 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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