# 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-03137. 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-03137
- **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-d4261a15

## 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, read with Rule 7(2) of the Insolvency & Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019, 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 a consortium led by State Bank of India, 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

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## Facts

Central Bank of India (Financial Creditor) sanctioned credit facilities to Rajvir Industries Ltd (Corporate Debtor). Shri Ritesh Kumar Agarwal stood as a personal guarantor for the Corporate Debtor. The Corporate Debtor defaulted in repaying the loan, leading to restructuring. The account was classified as NPA on 2018-06-29. The Financial Creditor invoked the personal guarantee. The Financial Creditor initiated proceedings under SARFAESI Act and filed a company petition under Section 7 of the Code to initiate CIRP against the Corporate Debtor. The CIRP petition was admitted on 2021-04-26. The Financial Creditor issued demand notices to the personal guarantor, who failed to pay. The Financial Creditor filed a petition under Section 95 of IBC, 2016, seeking initiation of

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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 noted that the availing of credit facilities by the Corporate Debtor, the

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**Interpretation:** The Tribunal interpreted the provisions of the IBC relating to personal

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

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## Parties

- **Judges:** Venkata Ramakrishn…; Veera Brahma Rao…
- **Appellants:** Central Bank of…
- **Respondents:** Rajvir Industries…; Ritesh Ag…

## 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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