# 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-03144. The Central Bank of India, acting as a financial creditor, filed a petition under Section 95 of…

- **Court:** NCLT
- **Order date:** 21 Apr 2022
- **Citation:** TCN-2022-NCLT-03144
- **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-5b3701b9

## Summary

### Background

The Central Bank of India, acting as a financial creditor, filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking the 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 a consortium led by the State Bank of India, had sanctioned credit facilities to the corporate debtor. The corporate debtor defaulted on repayment, leading to the invocation of the personal guarantee. The corporate debtor's account was classified as a Non-Performing Asset (NPA) on 29.06.2018. The financial creditor also initiated Corporate Insolvency Resolution Process (CIRP) against the corporate debtor

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## Facts

Central Bank of India (Financial Creditor) filed a petition under Section 95 of IBC, 2016 against Shri Ritesh Kumar Agarwal (Personal Guarantor) of M/s Rajvir Industries Ltd (Corporate Debtor). The Financial Creditor, along with other lenders under consortium with State Bank of India as lead bank, sanctioned Fund Based and Non-Fund Base Credit Facilities to the Corporate Debtor. The Financial Creditor sanctioned Rs.20 crores as a Term Loan in 2009, repayable by July 2014. Due to the Corporate Debtor's inability to repay, the payment schedule was modified on 11.02.2013. Shri Ritesh Kumar Agarwal stood as guarantor to secure the repayment. The outstanding amount in default is Rs. 7,29,36,344.03. The Corporate Debtor executed loan documents, and the Personal Guarantor

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## Issues and analysis

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

**Ratio:** The Tribunal considered that the Corporate Debtor availed credit facilities, the Personal

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**Reasoning:** The Tribunal noted that the Corporate Debtor availed credit facilities, the Personal

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**Interpretation:** The Tribunal interpreted the relevant provisions of the IBC, 2016, and the

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**Application:** The Tribunal applied the provisions of the IBC, 2016, and the Personal

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## Parties

- **Judges:** Venkata Ramakrishn…; Veera Brahma Rao…
- **Appellants:** Central Bank of…
- **Respondents:** Rajvir Industries…; Ritesh Ag…
- **Advocates:** P. Ramakr…; S. Rajago…

## Timeline

- **2009-01-01 — Term Loan San…**: Financial Creditor sanctioned Rs.20 crores…
- **2014-07-01 — Original Repayment…**: The Term Loan was initially…

## 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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