# In the matter of Bank of Maharashtra vs. Marella Srinivasa Reddy

> NCLT judgment dated 2024-11-29. Citation: TCN-2024-NCLT-00124. The case involves an application filed by Bank of Maharashtra, the Financial Creditor, under…

- **Court:** NCLT
- **Order date:** 29 Nov 2024
- **Citation:** TCN-2024-NCLT-00124
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-marella-srinivasa-reddy-c1d26fcb

## Summary

### Background

The case involves an application filed by Bank of Maharashtra, the Financial Creditor, under Section 123 read with 60(2) of the Insolvency and Bankruptcy Code, 2016, and Rule 7 of the Insolvency & Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtor) Rules, 2019, to initiate bankruptcy proceedings against Mr. Marella Srinivasa Reddy, the personal guarantor to M/s. Maven Life Sciences Private Limited, the Corporate Debtor. The Corporate Debtor had availed credit facilities from the Applicant Bank, for which the personal guarantee was provided by Mr. Reddy. The Corporate Debtor defaulted on its obligations, leading to its account being declared as NPA. The Creditor filed CP(IB) No. 45/95/HDB/2023 under

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## Facts

Bank of Maharashtra, a Public Sector Bank, extended credit facilities to M/s. Maven Life Sciences Private Limited, with Mr. Marella Srinivasa Reddy acting as the personal guarantor. The Applicant sanctioned a working capital facility consisting of Term Loan of Rs.100.00 Lakhs along with a Cash Credit Limited of Rs.200.00 Lakhs, Bank Guarantee Facility of Rs.50.00 Lakhs and Letter of Credit of rs.150.00 Lakhs. Mr. Reddy provided a personal guarantee via a Deed of Guarantee dated 16.07.2012. The Corporate Debtor defaulted, and its account was declared NPA on 28.01.2013. The total amount payable to the Financial Creditor was Rs.21,35,68,004.00 as of 18.10.2024. The Personal Guarantor failed to comply with the Form-B demand notice dated 15.06.2022. The Creditor filed

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## Issues and analysis

### Issue 1: Whether the Applicant/Creditor is entitled to proceed against the Respondent/Guarantor for …

**Ratio:** The ratio is based on the interpretation and application of Sections 121 and 123 of the

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**Reasoning:** The Tribunal reasoned that the resolution process initiated against the

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**Interpretation:** The interpretation involves understanding the interplay between Sections 95,

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**Application:** The Tribunal applied the ratio and reasoning to the specific facts of the case,

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Bank of Mah…
- **Respondents:** M/s.Maven Life…; Marella Srinivasa…
- **Advocates:** Aishw…; Varun A…; +1 more

## Timeline

- **2012-07-14 — Sanction Lett…**: Applicant sanctioned a…
- **2012-07-16 — Deed of Guaran…**: Respondent No.1…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 123 — Application by creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-123)

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