# In the matter of Bank of Maharashtra vs. V Swarna

> NCLT judgment dated 2023-03-13. Citation: TCN-2023-NCLT-04259. The Bank of Maharashtra filed a Company Petition under Section 95 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 13 Mar 2023
- **Citation:** TCN-2023-NCLT-04259
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bank-of-maharashtra-vs-v-swarna-42a160f6

## Summary

### Background

The Bank of Maharashtra filed a Company 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 Debtors) Rules, 2019, seeking initiation of the Insolvency Resolution Process against Smt. V Swarna, the Personal Guarantor of SVSVS Projects Private Limited (Corporate Debtor). The bank sought to recover outstanding debts guaranteed by Smt. V Swarna. The Personal Guarantor argued that the guarantee was revoked due to revisions in credit facilities and non-execution of fresh guarantee deeds. The bank contended that the Personal Guarantor had acknowledged and extended the guarantee through a revival

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## Facts

The Bank of Maharashtra filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, against Smt. V Swarna, the personal guarantor of SVSVS Projects Private Limited, the corporate debtor. The bank sought to initiate the Insolvency Resolution Process (IRP) against the personal guarantor based on a guarantee deed executed to secure financial assistance provided to the corporate debtor. The outstanding debt as of 27.12.2018 was Rs. 48,02,97,568.69. The bank issued a demand notice on 31.07.2021, which the personal guarantor failed to comply with. The corporate debtor was already undergoing CIRP proceedings initiated on 26.04.2021. The personal guarantor argued that the guarantee was revoked due to revisions in credit facilities and non-execution of fresh

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## Issues and analysis

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

**Ratio:** The principle of estoppel applies when a party's conduct or statement induces another

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**Reasoning:** The Adjudicating Authority reasoned that the Personal Guarantor's plea of revocation of

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

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**Application:** The revival letter, executed by the Personal Guarantor on 15.03.2017,

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Bank of Mah…
- **Respondents:** SVSVS Projects…; V Swa…

## Timeline

- **2014-03-25 — Deed of Gua…**: Personal Guarantor executed a Deed of Guarantee to secure financial assistance granted by…
- **2021-04-26 — CIRP Init…**: CIRP proceedings were initiated…

## 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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