# In the matter of Central Bank of India vs. M.S.P Rama Rao

> NCLT judgment dated 2024-01-23. Citation: TCN-2024-NCLT-02958. The case pertains to CP (IB) No. 27/123/HDB/2023 filed under Section 123 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 23 Jan 2024
- **Citation:** TCN-2024-NCLT-02958
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-of-india-vs-msp-rama-rao-515c5810

## Summary

### Background

The case pertains to CP (IB) No. 27/123/HDB/2023 filed under Section 123 of the Insolvency and Bankruptcy Code, 2016, read with the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019. The petition was filed by Central Bank of India, the Financial Creditor, against Mr. M.S.P Rama Rao, the Personal Guarantor, and M/s Konaseema Gas Power Limited, the Corporate Debtor. The Financial Creditor sought to initiate bankruptcy proceedings against the Personal Guarantor due to defaults in credit facilities extended to the Corporate Debtor. The Corporate Debtor had been granted various credit facilities by the Petitioner/Financial Creditor and other consortium member banks to set up a

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## Facts

Central Bank of India, a banking institution, filed a petition under Section 123 of the Insolvency and Bankruptcy Code, 2016, against Mr. M.S.P Rama Rao, the personal guarantor, and M/s Konaseema Gas Power Limited, the corporate debtor. The case, CP (IB) No. 27/123/HDB/2023, was heard by the National Company Law Tribunal (NCLT), Hyderabad Bench-1. The corporate debtor had received credit facilities from the petitioner and other consortium banks to establish a power plant and meet working capital needs. The limits sanctioned by the petitioner bank included fund-based and non-fund-based limits, aggregating to Rs 134.84 Cr. Mr. Rama Rao had executed a guarantee agreement guaranteeing the repayment of these credit facilities. The applicant bank's share in the facilities

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## Issues and analysis

### Issue 1: Whether the petition filed by the …

**Ratio:** The Adjudicating Authority has the power to admit a petition under Section 123 of the

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**Reasoning:** The Adjudicating Authority carefully perused the petition and found that the repayment

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**Interpretation:** Section 123 of the IBC, 2016, allows a financial creditor to file a petition

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**Application:** In this case, the repayment plan of the Personal Guarantor was rejected by the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Central Bank of…
- **Respondents:** M/s Konaseema Gas…; M.S.P Ram…

## Timeline

- **2012-10-01 — Account Classification…**: Loan accounts of the Corporate…
- **2018-02-16 — Guarantee Agreement…**: The Bank invoked the Guarantee…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 123 — Application by creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-123)

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