# In the matter of Central Bank of India vs. P.K. Iyer & Ors.

> NCLT judgment dated 2024-07-08. Citation: TCN-2024-NCLT-01051. Central Bank of India filed a petition under Section 95 of the Insolvency and Bankruptcy Code…

- **Court:** NCLT
- **Order date:** 8 Jul 2024
- **Citation:** TCN-2024-NCLT-01051
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-of-india-vs-pk-iyer-ors-075eca96

## Summary

### Background

Central Bank of India filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of the Insolvency Resolution Process against Mr. P.K. Iyer, the personal guarantor of Deccan Chronicle Holdings Limited (Corporate Debtor). The Corporate Debtor had availed credit facilities from the bank since 2011, including a working capital demand loan of Rs. 50 crores. Mr. Iyer, along with others, executed a deed of guarantee in 2011 guaranteeing the repayment of these facilities. The bank classified the Corporate Debtor's account as a Non-Performing Asset (NPA) in 2012 and initiated recovery proceedings under the SARFAESI Act, obtaining a recovery certificate from the Debt Recovery Tribunal (DRT). The bank issued demand notices to Mr. Iyer

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## Facts

Central Bank of India (Financial Creditor) filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Insolvency Resolution Process against Mr. P.K. Iyer (Personal Guarantor) of Deccan Chronicle Holdings Limited (Corporate Debtor). The Corporate Debtor availed credit facilities from the bank since 2011, including a working capital demand loan of Rs. 50 crores. Mr. Iyer executed a deed of guarantee in 2011 guaranteeing the repayment of these facilities. The bank classified the Corporate Debtor's account as a Non-Performing Asset (NPA) on 28.11.2012. The bank initiated recovery proceedings under the SARFAESI Act, 2002, vide OA No.505 of 2017 before the Debt Recovery Tribunal (DRT), Hyderabad, for recovery of the total dues

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## Issues and analysis

### Issue 1: Whether the present petition for initiation of Insolvency Resolution Process against the Personal …

**Ratio:** The Adjudicating Authority must independently assess the application under Section 95 of

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**Reasoning:** The court relied on the Supreme Court's ruling in Dilip B Jiwrajka Vs Union of India,

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**Interpretation:** Section 95 of the IBC requires the creditor to serve a demand notice on the

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**Application:** In this case, the court found that the Financial Creditor failed to properly

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Central Bank of…
- **Respondents:** Deccan Chronicle…; P K I…
- **Advocates:** Mr.V.V.S.…; Amir Ba…; +1 more

## Timeline

- **2011-01-01 — Credit Facilities…**: Deccan Chronicle Holdings Limited availed various credit facilities from Central Bank of…
- **2011-09-29 — Deed of Guarantee…**: Mr. P.K. Iyer, along with others, executed a Form Deed of Guarantee guaranteeing the…

## 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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