# In the matter of Canara Bank vs. Jayshree M Limbani

> NCLT judgment dated 2024-09-04. Citation: TCN-2024-NCLT-00671. The case pertains to an application filed by Canara Bank [Stressed Asset Management Branch]…

- **Court:** NCLT
- **Order date:** 4 Sept 2024
- **Citation:** TCN-2024-NCLT-00671
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/canara-bank-vs-jayshree-m-limbani-5e9bd66d

## Summary

### Background

The case pertains to an application filed by Canara Bank [Stressed Asset Management Branch] under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against Jayshree M. Limbani, who acted as a personal guarantor for a term loan of Rs. 50,00,00,000/- sanctioned to Elegant Forge & Equipments Private Limited. The loan was secured by a deed of personal guarantee provided by Jayshree M. Limbani dated 02.03.2019. The corporate debtor defaulted on its payment obligations, leading to the account being classified as a non-performing asset (NPA) on 30.11.2021. A legal notice was issued to the corporate debtor and the guarantor, followed by a demand notice in form-B to the guarantor on 17.11.2023, for an

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## Facts

Canara Bank sanctioned a term loan of Rs. 50,00,00,000/- to Elegant Forge & Equipments Private Limited on 05th October 2018. Jayshree M. Limbani provided a deed of personal guarantee dated 02.03.2019 to secure the loan. The corporate debtor defaulted on its payment obligations, leading to the account being classified as an NPA on 30.11.2021. Jayshree M. Limbani mortgaged two flats as security for the term loan. A legal notice was issued on 13.04.2022 to the corporate debtor and Jayshree M. Limbani, followed by a demand notice in form-B to Jayshree M. Limbani on 17.11.2023. As of 17.11.2023, a sum of Rs. 71,42,72,499.22/- was due and payable by the corporate debtor. Jayshree M. Limbani did not respond to the invocation notice or make any payments. The liability of

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## Issues and analysis

### Issue 1: Whether the application filed by Canara Bank under Section 95(1) of the Insolvency and Bankruptcy …

**Ratio:** Section 95(1) of the Insolvency and Bankruptcy Code, 2016, allows a creditor to file an

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**Reasoning:** The court observed that the petition for initiating the insolvency resolution process

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**Interpretation:** Section 95(1) of the IBC provides a mechanism for creditors to pursue

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**Application:** The court found that the application filed by Canara Bank met the requirements

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## Parties

- **Judges:** Charanjeet Singh…; LAKSHMI G…
- **Appellants:** Canara…
- **Respondents:** Elegant Forge &…; Jayshree M.…

## Timeline

- **2018-10-05 — Term Loan San…**: Canara Bank sanctioned a term loan of Rs. 50,00,00,000/- to Elegant Forge & Equipments…
- **2019-02-03 — Deed of Gua…**: Jayshree M. Limbani provided a deed of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95(1) — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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