# In the matter of Bank of Maharashtra Vs. Marella Srinivasa Reddy, CP (IB)/45/95/HDB/2023

> NCLT judgment dated 2023-06-16. Citation: TCN-2023-NCLT-02902. The Bank of Maharashtra filed a petition under Section 95 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 16 Jun 2023
- **Citation:** TCN-2023-NCLT-02902
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-marella-srinivasa-reddy-cp-71275f87

## 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 Mr. Marella Srinivasa Reddy, the personal guarantor of M/s. Maven Life Sciences Private Limited (the Corporate Debtor). The Corporate Debtor had availed credit facilities from the bank, and Mr. Reddy had executed a guarantee deed to secure these facilities. The corporate debtor defaulted on its repayment obligations, leading to the loan account being declared as NPA. Despite demand notices and opportunities to appear before the Tribunal, the personal guarantor failed to comply, leading to the filing of the present application.

## Facts

The Bank of Maharashtra extended credit facilities to M/s. Maven Life Sciences Private Limited, with Mr. Marella Srinivasa Reddy acting as the personal guarantor. The bank sanctioned a working capital facility consisting of Cash Credit, Bank Guarantee Facility and Letter of Credit. The corporate debtor defaulted on its repayment obligations, resulting in the loan account being classified as a Non-Performing Asset (NPA) on 2013-01-28. The total repayments of the corporate debtor is Rs. 15,61,37,642.33 /-, including a total interest amount of Rs. 11,03,68,822.33/- calculated until 2022-08-23. The bank issued a demand notice to the personal guarantor, but no payment was made. The bank filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking

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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 Tribunal considered the facts presented, including the default by the Corporate

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**Interpretation:** Section 100 of the IBC is interpreted to mean that if a personal guarantor has

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**Application:** In this case, the Corporate Debtor defaulted on its debt obligations to the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Bank of Mah…
- **Respondents:** Maven Life…; Marella Srinivasa…

## Timeline

- **2012-07-14 — Sanction…**: Petitioner Bank issued Sanction letter for Term Loan, Cash Credit, Guarantee and letter…
- **2012-07-16 — Deed of Gua…**: Deed of Guarantee executed…

## 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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