# In the matter of Bank of Maharashtra Vs. Nukala Savithri & Ors.

> NCLT judgment dated 2023-04-28. Citation: TCN-2023-NCLT-03586. The Bank of Maharastra filed a petition under Section 95 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 28 Apr 2023
- **Citation:** TCN-2023-NCLT-03586
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-nukala-savithri-ors-e4ea79a7

## Summary

### Background

The Bank of Maharastra filed a petition under Section 95 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 Debtor) Rules, 2019, seeking initiation of the Insolvency Resolution Process against the Personal Guarantor, Smt. Nukala Savithri, of the Corporate Debtor, SV SVS Projects Private Limited, due to non-payment of Rs. 48,02,97,568.69 as of 27.12.2018, including interest. The Financial Creditor had sanctioned working capital facilities to the Corporate Debtor, which the Corporate Debtor failed to honor. The Personal Guarantor had executed a Deed of Guarantee to secure the financial assistance granted to the

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## Facts

The Bank of Maharastra sanctioned working capital facilities consisting of a Cash Credit facility with a limit of Rs. 2.50 Crores and Bank Guarantee Facilities aggregating to Rs. 48 Crores, totaling Rs. 50.50 Crores, to SV SVS Projects Private Limited. The Corporate Debtor failed to honor obligations under a Composite Deed of Hypothecation dated 25.03.2014, and the loan amount was declared as NPA on 27.12.2018. The total principal amount of default payable was Rs. 32,30,71,217.76, along with a total interest amount of Rs. 15,72,26,350.93, calculated until 17.05.2022. On 25.03.2014, the Personal Guarantor, Smt. Nukala Savithri, executed a Deed of Guarantee to secure the financial assistance granted to the Corporate Debtor, undertaking to pay the Financial Creditor upon

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## Issues and analysis

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

**Ratio:** The approval of a resolution plan does not ipso facto discharge a personal guarantor (of

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**Reasoning:** The court relied on the judgment of the Hon'ble Apex Court in re “Lalit Kumar Jain Vs

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**Interpretation:** Section 100 of the Insolvency and Bankruptcy Code, 2016 allows for the

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**Application:** In this case, the Corporate Debtor, SV SVS Projects Private Limited, defaulted

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## Parties

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

## Timeline

- **2014-03-24 — Sanction of Working…**: Bank of Maharastra sanctioned a working capital facility to SV SVS Projects Private…
- **2014-03-25 — Execution of Deed of…**: Smt. Nukala Savithri executed a Deed of Guarantee to secure the financial assistance…

## 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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