# In the matter of Central Bank of India Vs. Mr.Kothapatti Raju,CP (IB) No. 89- 95-AMR-2022

> NCLT judgment dated 2022-11-10. Citation: TCN-2022-NCLT-00491. The Central Bank of India, as the Financial Creditor, filed a petition against Mr. Kothapatti…

- **Court:** NCLT
- **Order date:** 10 Nov 2022
- **Citation:** TCN-2022-NCLT-00491
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-of-india-vs-mrkothapatti-rajucp-17c0f326

## Summary

### Background

The Central Bank of India, as the Financial Creditor, filed a petition against Mr. Kothapatti Raju, the Personal Guarantor (Respondent No. 1), and Sri Ananda Lakshmi Narasimha Industries India Private Limited, the Corporate Debtor (Respondent No. 2), under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The application was specifically filed against the Personal Guarantor of the Corporate Debtor. The Corporate Debtor had availed credit facilities from the Financial Creditor, and upon defaulting, the Financial Creditor approached the Debt Recovery Tribunal (DRT), which directed the Corporate Debtor to pay a sum of INR 33,93,23,650.15/-. Despite the DRT order, the Corporate Debtor

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## Facts

The Central Bank of India (Financial Creditor) extended credit facilities totaling INR 33,18,09,761.02 to Sri Ananda Lakshmi Narasimha Industries India Private Limited (Corporate Debtor). Mr. Kothapatti Raju (Respondent No. 1) acted as the Personal Guarantor for these credit facilities, executing Form Guarantees on 13.03.2013, 29.03.2014, September 2016, and 01.11.2016. The Corporate Debtor defaulted on repayment, leading the Financial Creditor to issue a recall letter on 17.03.2020 demanding INR 32,34,97,219.64/- within seven days. The Corporate Debtor failed to discharge the debt. Consequently, the Financial Creditor approached the Debt Recovery Tribunal (DRT) on 05.08.2020, resulting in an order on 04.04.2022 directing the Corporate Debtor to pay INR

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## Issues and analysis

### Issue 1: Whether the application under Section 95 of the IBC, 2016, is maintainable against the Personal …

**Ratio:** Section 95 of the IBC allows a creditor to initiate insolvency resolution process against

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**Reasoning:** The court noted that the application was filed under Section 95 of the IBC, 2016,

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**Interpretation:** Section 95 provides a mechanism for creditors to pursue insolvency proceedings

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**Application:** The court applied Section 95 to the facts of the case, recognizing that the

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## Parties

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

## Timeline

- **2013-03-13 — Execution of Form…**: Respondent No.1 executed Form…
- **2014-03-29 — Execution of Form…**: Respondent No.1 executed Form…

## 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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