# In the matter of Central Bank of India Vs. Ritesh Agarwal & Rajvir Industries Ltd, CP (IB) No. 249/2021

> NCLT judgment dated 2022-04-21. Citation: TCN-2022-NCLT-03152. The Central Bank of India, as a financial creditor, filed a petition under Section 95 of the…

- **Court:** NCLT
- **Order date:** 21 Apr 2022
- **Citation:** TCN-2022-NCLT-03152
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-of-india-vs-ritesh-agarwal-rajvir-industries-ltd-cp-0abcadcd

## Summary

### Background

The Central Bank of India, as a financial creditor, filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of the Insolvency Resolution Process against Shri Ritesh Kumar Agarwal, the personal guarantor of M/s Rajvir Industries Ltd, the corporate debtor. The financial creditor, along with other lenders under consortium with State Bank of India as the lead bank, had sanctioned credit facilities to the corporate debtor. Due to the corporate debtor's inability to repay the loan, the payment schedule was modified. The corporate debtor's account was classified as NPA, and the personal guarantee was invoked. The financial creditor also initiated CIRP against the corporate debtor under Section 7 of the Code. Subsequently, the

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## Facts

The Central Bank of India, acting as a financial creditor, extended credit facilities to M/s Rajvir Industries Ltd, the corporate debtor. Shri Ritesh Kumar Agarwal stood as the personal guarantor for the loan. The corporate debtor defaulted on the repayment, leading to the account being classified as a Non-Performing Asset (NPA) on 2018-06-29. The financial creditor invoked the personal guarantee and initiated proceedings under the SARFAESI Act, 2002, before the Debt Recovery Tribunal (DRT). Subsequently, the financial creditor also filed a company petition under Section 7 of the IBC to initiate Corporate Insolvency Resolution Process (CIRP) against the corporate debtor, which was admitted on 2021-04-26. Following the enactment of the Insolvency Resolution Process for

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## Issues and analysis

### Issue 1: Whether Insolvency Resolution Process can be ordered …

**Ratio:** The Tribunal considered the fact that the personal guarantee was executed for the

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**Reasoning:** The Tribunal considered the submissions of both parties and the report of the IRP, which

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**Interpretation:** The Tribunal interpreted the relevant provisions of the IBC and the Insolvency

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**Application:** Based on the facts and the legal principles, the Tribunal concluded that it was

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. VEERA BRAHMA…
- **Appellants:** Central Bank of…
- **Respondents:** Rajvir Industries…; Ritesh Ag…
- **Advocates:** P. Ramakr…; S. Rajago…

## Timeline

- **2009-01-01 — Term Loan San…**: Financial Creditor sanctioned an amount…
- **2013-02-11 — Payment Schedule…**: Payment schedule was modified…

## 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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