# In the matter of Central Bank vs. Kavita Aggarwal

> NCLT judgment dated 2024-08-06. Citation: TCN-2024-NCLT-00869. The case pertains to an application filed by Canara Bank through the Resolution Professional…

- **Court:** NCLT
- **Order date:** 6 Aug 2024
- **Citation:** TCN-2024-NCLT-00869
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-vs-kavita-aggarwal-1b330d4b

## Summary

### Background

The case pertains to an application filed by Canara Bank through the Resolution Professional (RP) under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the insolvency resolution process against Ms. Kavita 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. Upon default by the Corporate Debtor, Canara Bank invoked the personal guarantee of Ms. Aggarwal and initiated proceedings under the IBC. The RP submitted a report recommending the admission of the petition. The Personal Guarantor raised objections, primarily contending that the application was premature and that Canara Bank lacked the authority

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## 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, with Karur Vysya Bank as the lead member. Personal guarantees were executed by various guarantors, including Ms. Kavita Aggarwal (Respondent/Personal Guarantor). The Corporate Debtor defaulted on its debt, leading to restructuring agreements. Canara Bank invoked the personal guarantee on 25.04.2018. ICICI Bank initiated CIRP against the Corporate Debtor under Section 7 of the IBC, which was admitted, and a resolution plan was approved on 12.09.2019. Canara Bank issued a demand notice to Ms. Aggarwal on 16.11.2022, seeking payment of Rs. 113,90,24,108.65. As no payment was received, Canara Bank

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## Issues and analysis

### Issue 1: Whether the report of the RP was prepared in undue haste without giving an opportunity to the …

**Ratio:** The RP is required to provide an opportunity to the Personal Guarantor to present their

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**Reasoning:** The NCLT found that the RP had sent a letter to the Personal Guarantor intimating them

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**Interpretation:** The RP must provide an opportunity to the Personal Guarantor to present their

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**Application:** In this case, the Personal Guarantor was given an opportunity to present their

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Respondents:** M/s. Sunstar…; Kavita Ag…

## 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)

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