# In the matter of Central Bank of India Vs. Pyda Venkat Rama Lalit Ranjit, CP (IB) No. 102/95/AMR/2022

> NCLT judgment dated 2022-10-21. Citation: TCN-2022-NCLT-00646. The Central Bank of India, acting as the Financial Creditor, filed a petition against Mr. Pyda…

- **Court:** NCLT
- **Order date:** 21 Oct 2022
- **Citation:** TCN-2022-NCLT-00646
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-of-india-vs-pyda-venkat-rama-lalit-ranjit-cp-62222f19

## Summary

### Background

The Central Bank of India, acting as the Financial Creditor, filed a petition against Mr. Pyda Venkata Rama Lalith Ranjit, the Personal Guarantor/Respondent, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Financial Creditor had sanctioned a term loan of Rs. 35 Crores to the Corporate Debtor, for which the Respondent stood as guarantor. The Corporate Debtor defaulted on the loan, leading to its classification as NPA. The Financial Creditor initiated recovery proceedings under the SARFAESI Act, including issuing demand notices and taking possession of mortgaged securities. The Corporate Debtor's attempts to settle the dues through OTS were unsuccessful, prompting the Financial Creditor to file the application for CIRP against the Personal

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## Facts

The Central Bank of India sanctioned a term loan of Rs. 35 Crores to a Corporate Debtor on 2013-04-23. The Corporate Debtor executed a Term Loan Agreement and a letter of Hypothecation on 2013-05-06, creating an equitable mortgage. Mr. Pyda Venkata Rama Lalith Ranjit stood as a guarantor for the loan. The Corporate Debtor defaulted, and the loan account was declared NPA on 2015-07-29. The Corporate Debtor acknowledged the debt on 2017-02-21. The bank issued a demand notice under the SARFAESI Act on 2018-01-01. The Corporate Debtor failed to repay, and the bank took possession of mortgaged securities, issuing a sale notice on 2021-02-10, with an auction date set for 2021-03-15. The DRT Visakhapatnam stayed the auction. The Corporate Debtor submitted an OTS on

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## Issues and analysis

### Issue 1: Whether notice is required to be given to the Personal Guarantor before the appointment of an …

**Ratio:** The ratio is that no notice is required to be given to the Respondent (Personal

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**Reasoning:** The Tribunal reasoned that the legislature has enacted various provisions in the IBC that

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**Interpretation:** The interpretation is that the IBC provides a specific procedure for initiating

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Central Bank of…
- **Respondents:** M/s KVR Power…; Mr.Pyda Venkata…
- **Advocates:** Mr.P.B.A.…; Mr.Parth…; +3 more

## Timeline

- **2013-04-23 — Loan San…**: The Petitioner/Financial Creditor sanctioned Term Loan of Rs.35 Crores to the Corporate…
- **2013-05-06 — Loan Agre…**: The Corporate Debtor executed Term Loan…

## 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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