# In the matter of Central Bank of India Vs. Chavva Satya Krishna, CP (IB) No. 97/95/AMR/2022

> NCLT judgment dated 2023-01-25. Citation: TCN-2023-NCLT-04874. The case involves a company petition filed by the Central Bank of India (Financial Creditor)…

- **Court:** NCLT
- **Order date:** 25 Jan 2023
- **Citation:** TCN-2023-NCLT-04874
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-of-india-vs-chavva-satya-krishna-cp-a6f6db32

## Summary

### Background

The case involves a company petition filed by the Central Bank of India (Financial Creditor) under Section 60(2) and 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Process for Personal Guarantors to Corporate Debtors) Rules, 2019. The petition seeks to initiate the Insolvency Resolution Process against the Personal Guarantor of the Corporate Debtor, Sri Ananda Lakshmi Narasimha Industries India Private Limited. The Corporate Debtor availed various credit facilities from the Financial Creditor, and the Respondent No.1, Mr. Chavva Satya Krishna, stood as guarantor for these facilities. The Corporate Debtor defaulted on repayment, leading the Financial Creditor to

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## Facts

Central Bank of India, the Financial Creditor (FC), filed a company petition under Section 60(2) and 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Mr. Chavva Satya Krishna, the Personal Guarantor of Sri Ananda Lakshmi Narasimha Industries India Private Limited, the Corporate Debtor (CD). The CD had availed various credit facilities from the FC, with Mr. Krishna acting as guarantor. The CD defaulted on its repayment obligations, leading the FC to issue a recall letter on 17.03.2020, demanding Rs. 32,34,97,219.64/-. The CD failed to repay, prompting the FC to approach the Debt Recovery Tribunal (DRT). The DRT, on 04.04.2022, directed the CD to pay Rs. 33,93,23,650.15/- as of 03.08.2020.

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## Issues and analysis

### Issue 1: Whether the Company Petition filed by the Financial Creditor is admissible under Section 60(2) and …

**Ratio:** Section 60(2) and 95 of the IBC, 2016, read with Rule 7(2) of the Insolvency and

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**Reasoning:** The NCLT considered the provisions of Section 60(2) and 95 of the IBC, 2016, and the

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**Interpretation:** Section 60(2) allows NCLT to adjudicate insolvency resolution and liquidation

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**Application:** The NCLT applied the provisions of Section 60(2) and 95 of the IBC, 2016, to

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Central Bank of…
- **Respondents:** Ananda Lakshmi…; Chavva Satya…

## Timeline

- **2020-03-17 — Recall Letter…**: The Financial Creditor issued a recall letter to the Corporate Debtor, demanding…
- **2020-08-05 — DRT Appro…**: The Financial Creditor approached the Debt Recovery Tribunal (DRT) due to the Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(2) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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