# 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-03924. 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-03924
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-manda-venkata-mahalakshmi-cp-73286c8e

## 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. The corporate debtor had availed working capital facilities from the bank, and upon default, the bank initiated proceedings against the personal guarantor. 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, leading to a total principal amount of default of Rs. 32,30,71,217.76 and a total interest amount of Rs. 15,72,26,350.93 until 17.05.2022. The loan account of the Corporate Debtor was declared as NPA on 27.12.2018. 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 Respondent No.1/Personal

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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 initiation of the

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**Reasoning:** The court relied on the report of the Resolution Professional, which indicated that the

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**Interpretation:** The court interpreted Section 100 of the IBC, 2016, in conjunction with the

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**Application:** The court applied the provisions of Section 100 of the IBC, 2016, to the facts

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Bank of Mah…
- **Respondents:** SV SVS Projects…; Smt.Manda Venkata…

## Timeline

- **2014-03-24 — Sanction…**: Date of one of the sanction letters…
- **2014-03-25 — Deed of Gua…**: Corporate Debtor, Personal Guarantor executed a Deed of Guarantee to secure the financial…

## 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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