# In the matter of Central Bank vs. Rakesh Aggarwal

> NCLT judgment dated 2024-08-06. Citation: TCN-2024-NCLT-00871. Canara Bank, acting as a financial creditor, filed a petition under Section 95(1) of the…

- **Court:** NCLT
- **Order date:** 6 Aug 2024
- **Citation:** TCN-2024-NCLT-00871
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-vs-rakesh-aggarwal-f0b9efb5

## Summary

### Background

Canara Bank, acting as a financial creditor, filed a petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, to initiate the insolvency resolution process against Mr. Rakesh Aggarwal, the personal guarantor to the corporate debtor, M/s Sunstar Overseas Limited. The corporate debtor had availed various credit facilities from a consortium of banks, including Canara Bank. The corporate debtor defaulted on its payments, leading to the invocation of the personal guarantee by Canara Bank. The Resolution Professional (RP) appointed by the Adjudicating Authority filed a report recommending the admission of the petition. The personal guarantor raised objections, contending that the petition was not maintainable and that the demand was raised against him on a

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## Facts

M/s Sunstar Overseas Limited (Corporate Debtor) availed credit facilities from a consortium of banks, including Canara Bank. Mr. Rakesh Aggarwal stood as a personal guarantor to the Corporate Debtor. The Corporate Debtor defaulted on its payments. Canara Bank invoked the personal guarantee of Mr. Rakesh Aggarwal. Canara Bank filed a petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, to initiate the insolvency resolution process against Mr. Rakesh Aggarwal. The Resolution Professional (RP) appointed by the Adjudicating Authority filed a report recommending the admission of the petition. The personal guarantor raised objections, contending that the petition was not maintainable and that the demand was raised against him on a standalone basis,

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## Issues and analysis

### Issue 1: Whether the petition filed by Canara Bank under Section 95(1) of the Insolvency and Bankruptcy …

**Ratio:** Section 95(1) of the Insolvency and Bankruptcy Code, 2016, allows a creditor to initiate

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**Reasoning:** The Adjudicating Authority found that Canara Bank, as a financial creditor, had the right

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**Interpretation:** Section 95(1) provides a mechanism for creditors to recover their dues from

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**Application:** The Adjudicating Authority applied Section 95(1) to the facts of the case,

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## Parties

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