# In the matter of Canara Bank vs. Pramod Kumar Agarwal

> NCLT judgment dated 2024-06-04. Citation: TCN-2024-NCLT-01241. This case involves an application by Canara Bank, a financial creditor, to initiate the…

- **Court:** NCLT
- **Order date:** 4 Jun 2024
- **Citation:** TCN-2024-NCLT-01241
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/canara-bank-vs-pramod-kumar-agarwal-905f4ebd

## Summary

### Background

This case involves an application by Canara Bank, a financial creditor, to initiate the Insolvency Resolution Process against Pramod Kumar Agarwal, a personal guarantor to the corporate debtor, M/s Shree Basant Oils Ltd. The application is filed 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, and regulation 4(2) of IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019. The corporate debtor, M/s Shree Basant Oils Ltd., is under liquidation since 14.12.2021.

## Facts

Canara Bank, the financial creditor, filed an application to initiate the Insolvency Resolution Process against Pramod Kumar Agarwal, the personal guarantor of M/s Shree Basant Oils Ltd., the corporate debtor. The guarantor executed deeds of guarantee for the facilities entered into between Canara Bank and the corporate debtor. The total maximum debt sanctioned under the working capital facilities was Rs.90 Crore. A default occurred on 25.11.2019 due to non-payment by the personal guarantor. The Applicant Bank issued a statutory Demand Notice dated 23.01.2024. The personal guarantor executed a personal guarantee on 12.09.2016. The Applicant issued a Demand Notice in Form B on 23.01.2024, but no response was received. The counsel representing the personal guarantors

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## Issues and analysis

### Issue 1: Whether the application by Canara Bank to initiate the Insolvency Resolution Process against the …

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016 allows a creditor to initiate the

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**Reasoning:** The court considered the factual matrix of the case, noting that the guarantor had

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**Interpretation:** Section 95 provides a mechanism for creditors to recover debts from personal

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**Application:** The court applied Section 95 to the facts of the case, noting that Pramod Kumar

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** Canara…
- **Respondents:** M/s Shree Basant…; PRAMOD KUMAR…

## Timeline

- **2016-09-12 — Execution of Personal…**: Pramod Kumar Agarwal executed a personal…
- **2019-11-25 — Default Occ…**: Default occurred due to…

## 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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