# In the matter of Central Bank of India vs. Upender Kumar Agarwal

> NCLT judgment dated 2024-12-11. Citation: TCN-2024-NCLT-00070. The case involves an application (IA No. 1299/2024) filed in a Company Petition (CP (IB) No.…

- **Court:** NCLT
- **Order date:** 11 Dec 2024
- **Citation:** TCN-2024-NCLT-00070
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-of-india-vs-upender-kumar-agarwal-38eeebff

## Summary

### Background

The case involves an application (IA No. 1299/2024) filed in a Company Petition (CP (IB) No. 246/2021) under Section 123 of the Insolvency and Bankruptcy Code (IBC), 2016, read with the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019. The applicant, Central Bank of India, sought leave to initiate bankruptcy proceedings against the respondent, Upender Kumar Agarwal, who is the personal guarantor to the corporate debtor, Rajvir Industries Limited. The corporate debtor's account had slipped into the NPA category due to default in repayment. An earlier application filed by State Bank of India under Section 7 of IBC against the corporate debtor was admitted. The Resolution

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## Facts

Central Bank of India, the applicant, is a creditor and joint lender to Rajvir Industries Limited, the corporate debtor. The corporate debtor's account became an NPA due to default in repayment. State Bank of India, another creditor, filed an application under Section 7 of the IBC against the corporate debtor, which was admitted. The applicant also filed OA before DRT-II, Hyderabad, for recovery of dues. The Resolution Professional (RP) recommended admission of the application under Section 95 of the IB Code. An order of admission was passed on 21.04.2022. The RP filed an application stating that the personal guarantor, Upender Kumar Agarwal, had not submitted any repayment plan. The petitioner/creditor filed CP(IB) No 31/123/HDB/2023 under Section 123 of the IBC,

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## Issues and analysis

### Issue 1: Whether the Applicant/Creditor is entitled to proceed against the Respondent/Guarantor for …

**Ratio:** The ratio decidendi is based on the interpretation of Section 121(2) of the IBC, which

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**Reasoning:** The court reasoned that the intention behind fixing the timeline in Section 121(2) is to

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**Interpretation:** The interpretation of Section 121(2) as directory rather than mandatory

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**Application:** In this specific case, the court applied the ratio and reasoning to reject the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Central Bank of…
- **Respondents:** Rajvir Industries…; Upender Kumar…

## Timeline

- **2021-01-01 — Company Petiti…**: Company Petition…
- **2021-01-01 — IA Filed…**: IA (IBC) 1299/2024 filed in…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 123 — Application by creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-123)

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