# In the matter of Central Bank of India vs. Sumatichand Gouti

> NCLT judgment dated 2025-01-17. Citation: TCN-2025-NCLT-00613. The case pertains to a Company Petition (IB) No. 642 of 2024 filed by Central Bank of India,…

- **Court:** NCLT
- **Order date:** 17 Jan 2025
- **Citation:** TCN-2025-NCLT-00613
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-of-india-vs-sumatichand-gouti-85ffe853

## Summary

### Background

The case pertains to a Company Petition (IB) No. 642 of 2024 filed by Central Bank of India, the Financial Creditor, under Section 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019. The petition seeks to initiate a Personal Insolvency Resolution Process (CIRP) against Mr. Sumatichand Gouti, the Respondent and Personal Guarantor, due to defaults on a Metal Gold Loan facility extended to Sumati Chand Gouti Jewellers Private Limited, the Corporate Debtor.

## Facts

Central Bank of India extended a Metal Gold Loan facility to Sumati Chand Gouti Jewellers Private Limited (the Corporate Debtor), where Sumatichand Gouti (the Respondent) is the Director. The facility was a Fund Based Facility (Metal Gold Loan) under the Cent Bullion Scheme for drawing gold for making jewellery for export purposes. The sanctioned amount was Rs. 115 Crores with an interest of 3.5% per month over the base rate. The Corporate Debtor executed several documents to secure the facility, including a Demand Promissory Note, Letter of Hypothecation, and Bullion Agreement, all dated 07.09.2012. The facility was also secured by a personal guarantee from Sumatichand Gouti and a corporate guarantee from Sumati Chand Gouti Jewellers Private Limited. The Corporate

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## Issues and analysis

### Issue 1: Whether the application for initiating insolvency resolution process against the personal guarantor …

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016 allows a creditor to initiate

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**Reasoning:** The court considered the documents submitted by the Financial Creditor, including the

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**Interpretation:** Section 95 of the IBC provides a mechanism for creditors to recover their dues

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**Application:** In this case, the court found that the Corporate Debtor had defaulted on its

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## Parties

- **Judges:** LAKSHMI G…; Charanjeet Singh…
- **Appellants:** Central Bank of…
- **Respondents:** Sumati Chand…; Sumatichand…

## Timeline

- **2012-09-07 — Facility San…**: The Corporate Debtor availed a Metal Gold Loan facility of Rs. 115 Crores vide Sanction…
- **2017-04-05 — Facility R…**: The Facility was first renewed by the Financial Creditor vide Sanction Letter dated…

## 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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