# In the matter of Central Bank vs. Navita Aggarwal

> NCLT judgment dated 2024-08-06. Citation: TCN-2024-NCLT-00865. Canara Bank, acting through its Resolution Professional (RP), filed a petition under Section…

- **Court:** NCLT
- **Order date:** 6 Aug 2024
- **Citation:** TCN-2024-NCLT-00865
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-vs-navita-aggarwal-3634023a

## Summary

### Background

Canara Bank, acting through its Resolution Professional (RP), filed a petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the insolvency resolution process against Ms. Navita Aggarwal, the personal guarantor to M/s Sunstar Overseas Limited, the corporate debtor. The corporate debtor had availed various credit facilities from a consortium of banks, including Canara Bank. Upon default, Canara Bank invoked the personal guarantee and issued a demand notice to Ms. Aggarwal. The RP appointed by the Adjudicating Authority submitted a report recommending the admission of the petition. The personal guarantor raised objections, primarily contending that the petition was premature and that Canara Bank lacked the authority to act

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## Facts

M/s Sunstar Overseas Limited (Corporate Debtor) availed credit facilities from a consortium of banks, including Canara Bank. Ms. Navita Aggarwal stood as a personal guarantor for the Corporate Debtor. The Corporate Debtor defaulted on its debt obligations. Canara Bank invoked the personal guarantee of Ms. Aggarwal and issued a demand notice on 16.11.2022, seeking payment of Rs 113,90,24,108.65/-. Ms. Aggarwal responded on 22.12.2022, raising objections. Canara Bank filed a petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, on 24.12.2022. An RP was appointed, who submitted a report recommending the admission of the petition. The RP sent letters to Ms. Aggarwal, seeking information and evidence of repayment. Ms. Aggarwal raised objections to the

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## Issues and analysis

### Issue 1: Whether Canara Bank, as a member of a consortium of banks, is entitled to initiate insolvency …

**Ratio:** A member of a consortium bank is competent to file an application for initiating

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**Reasoning:** The Adjudicating Authority reasoned that the extracted clauses of the sanction letter

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**Interpretation:** This interpretation clarifies that individual banks within a consortium retain

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

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## Parties

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