# In the matter of Central Bank of India Vs. Vakalpudi Gnaneswara Rao, CP (IB) No. 88/95/AMR/2022

> NCLT judgment dated 2022-10-10. Citation: TCN-2022-NCLT-00803. The Central Bank of India, as the Financial Creditor, filed a petition against Mr. Vakalpudi…

- **Court:** NCLT
- **Order date:** 10 Oct 2022
- **Citation:** TCN-2022-NCLT-00803
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-of-india-vs-vakalpudi-gnaneswara-rao-cp-012686f2

## Summary

### Background

The Central Bank of India, as the Financial Creditor, filed a petition against Mr. Vakalpudi Gnaneswara Rao, the Personal Guarantor (Respondent No. 1), and Sri Ananda Lakshmi Narasimha Industries India Private Limited, the Corporate Debtor (Respondent No. 2), seeking to initiate Corporate Insolvency Resolution Process (CIRP). The application was filed under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, and the prayer was directed against the Personal Guarantor. The Corporate Debtor had availed credit facilities from the Financial Creditor, and Mr. Vakalpudi Gnaneswara Rao stood as a personal guarantor for these facilities. The Corporate Debtor defaulted in repaying the debt, leading to the Financial Creditor approaching the Debt Recovery Tribunal (DRT).

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## Facts

The Central Bank of India (Financial Creditor) extended credit facilities totaling INR 33,18,09,761.02 to Sri Ananda Lakshmi Narasimha Industries India Private Limited (Corporate Debtor). Mr. Vakalpudi Gnaneswara Rao (Respondent No.1) acted as the personal guarantor for these credit facilities, executing form guarantees on multiple dates. The Corporate Debtor defaulted on repayments, leading the Financial Creditor to issue a recall letter on 2020-03-17 for INR 32,34,97,219.64. The Corporate Debtor failed to discharge the debt, prompting the Financial Creditor to approach the Debt Recovery Tribunal (DRT) on 2020-08-05. The DRT ordered the Corporate Debtor on 2022-04-04 to pay INR 33,93,23,650.15 as of 2020-08-03, plus interest. Despite the DRT order, the Corporate

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## Issues and analysis

### Issue 1: Whether the application under Section 95 of the …

**Ratio:** The Tribunal has the power to entertain the application under Section 95 of IBC, 2016, if

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**Reasoning:** The Tribunal considered the facts presented and determined that the application met the

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**Interpretation:** Section 95 of the IBC allows a creditor to initiate insolvency proceedings

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**Application:** The Tribunal found the application to be complete and therefore determined that

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Central Bank of…
- **Respondents:** Ananda Lakshmi…; Vakalpudi…
- **Advocates:** Mr.V.V.S.…

## Timeline

- **2013-03-13 — Execution of Form…**: Respondent No.1 executed Form…
- **2014-03-29 — Execution of Form…**: Respondent No.1 executed Form…

## 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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