# In the matter of Central Bank vs. Sadhna Aggarwal

> NCLT judgment dated 2024-08-06. Citation: TCN-2024-NCLT-00870. The case involves a petition filed by Canara Bank through its Resolution Professional (RP)…

- **Court:** NCLT
- **Order date:** 6 Aug 2024
- **Citation:** TCN-2024-NCLT-00870
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-bank-vs-sadhna-aggarwal-c955cb36

## Summary

### Background

The case involves a petition filed by Canara Bank through its Resolution Professional (RP) under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate insolvency resolution process against Ms. Sadhna Aggarwal, the personal guarantor to Sunstar Overseas Limited, the Corporate Debtor (CD). The CD had availed credit facilities from a consortium of banks, including Canara Bank. The CD defaulted on its debt, leading to the invocation of the personal guarantee. The RP filed a report recommending the admission of the petition, which was opposed by the personal guarantor. The personal guarantor raised objections regarding the report's preparation, the bank's authority to act individually, and the non-release of additional working capital by the

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## Facts

Sunstar Overseas Limited (CD) availed credit facilities from a consortium of banks, including Canara Bank. Ms. Sadhna Aggarwal stood as a personal guarantor to the CD. The CD defaulted on its debt, amounting to Rs. 113,90,24,108.65/- as on 31.10.2022. Canara Bank invoked the personal guarantee of Ms. Sadhna Aggarwal on 25.04.2018. Canara Bank issued a demand notice to Ms. Sadhna Aggarwal on 16.11.2022, seeking payment of the default amount. Canara Bank filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, on 24.12.2022. The RP submitted a report recommending the admission of the petition. Ms. Sadhna Aggarwal raised objections to the admission of the petition, including objections regarding the report's preparation, the bank's authority to act

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## Issues and analysis

### Issue 1: Whether the report of the Resolution Professional (RP) was prepared in undue haste without giving …

**Ratio:** The RP is required to submit a report within a specified period, and the PG was given an

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**Reasoning:** The Adjudicating Authority noted that the RP wrote a letter to the PG intimating him

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**Interpretation:** The RP's duty is to assess the situation and submit a report within the

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**Application:** The RP sent a letter to the PG on 19.12.2023, and the PG did not reply until

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** Canara Bank…
- **Respondents:** Sunstar Overseas…; Sadhna 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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