# In the matter of Central Bank vs. Kapil Aggarwal

> NCLT judgment dated 2024-08-06. Citation: TCN-2024-NCLT-00876. Canara Bank, acting through its Resolution Professional, filed a petition under Section 95(1)…

- **Court:** NCLT
- **Order date:** 6 Aug 2024
- **Citation:** TCN-2024-NCLT-00876
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-vs-kapil-aggarwal-b58aa16b

## Summary

### Background

Canara Bank, acting through its Resolution Professional, filed a petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the insolvency resolution process against Mr. Kapil Aggarwal, the personal guarantor to M/s Sunstar Overseas Limited (Corporate Debtor). The Corporate Debtor had availed various credit facilities from a consortium of banks, including Canara Bank. The Corporate Debtor defaulted on its debt, leading to the invocation of the personal guarantee. The Resolution Professional appointed by the Adjudicating Authority filed a report recommending the admission of the petition. The Personal Guarantor raised objections, including the argument that Canara Bank could not act independently and that the demand was time-barred.

…

## Facts

M/s Sunstar Overseas Limited (Corporate Debtor) availed credit facilities from a consortium of banks, including Canara Bank. An Interse Agreement was executed between the banks, designating Karur Vysya Bank as the lead member. Mr. Kapil Aggarwal stood as the Personal Guarantor (PG) for the Corporate Debtor. The Corporate Debtor defaulted on its debt, leading to a Master Restructuring Agreement (MRA). Canara Bank invoked the personal guarantee on 25.04.2018. ICICI Bank initiated CIRP against the Corporate Debtor under Section 7 of the IB Code, which was admitted, and a resolution plan was approved. Canara Bank issued a demand notice to the PG on 16.11.2022, seeking payment of Rs 113,90,24,108.65/-. The PG replied on 22.12.2022, raising objections. Canara Bank filed a

…

## Issues and analysis

### Issue 1: Whether Canara Bank, as a member of a consortium of banks, has the authority to initiate action …

**Ratio:** A member of a consortium bank is competent to file an application under Section 7 of the

…

**Reasoning:** The Adjudicating Authority relied on the principle that a member of a consortium bank is

…

**Interpretation:** This means that any member of the consortium, including Canara Bank, has the

…

**Application:** The Adjudicating Authority applied this principle to the present case, holding

…

## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** Canara Bank…
- **Respondents:** M/s. Sunstar…; Kapil Agg…

## Timeline

- **2010-01-29 — Interse Agr…**: An Interse Agreement was executed between Karur Vysya Bank Ltd. and other consortium…
- **2015-10-30 — Board Reso…**: A board resolution was passed by the CD for approval of Draft Master Restructuring…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95(1) — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-vs-kapil-aggarwal-b58aa16b