# In the matter of Dilip Chhabria Design Pvt. Ltd.

> NCLT judgment dated 2023-10-20. Citation: TCN-2023-NCLT-01078. The case involves an Interlocutory Application filed by the Resolution Professional against…

- **Court:** NCLT
- **Order date:** 20 Oct 2023
- **Citation:** TCN-2023-NCLT-01078
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/dilip-chhabria-design-pvt-ltd-02c18ed3

## Summary

### Background

The case involves an Interlocutory Application filed by the Resolution Professional against Axis Bank Pvt Ltd and M/s BMW India Financial Services Private Limited, seeking directions to deposit proceeds received during the CIRP proceedings from the Suspended Directors, Erstwhile Directors & Personal Guarantors towards the settlement of Loan Account & discharge of liabilities. The Respondent No. 1 had granted an auto loan facility to the Corporate Debtor based on security documents. The application seeks recovery of money from the Personal Guarantors of the Corporate Debtor by way of One Time Settlement.

## Facts

The Resolution Professional filed an Interlocutory Application against Axis Bank Pvt Ltd and M/s BMW India Financial Services Private Limited, seeking directions for the respondents to deposit proceeds received during the CIRP proceedings. These proceeds originated from the Suspended Directors, Erstwhile Directors, and Personal Guarantors, intended for the settlement of a Loan Account and discharge of liabilities. Respondent No. 1 had provided an auto loan to the Corporate Debtor, secured by documents executed between Respondent No. 1 and the Corporate Debtor. The application aimed to recover money from the Personal Guarantors through a One Time Settlement. The court acknowledged that the funds in question originated from the Personal Guarantors and did not belong to

…

## Issues and analysis

### Issue 1: Whether the Interlocutory Application seeking recovery of money from the Personal Guarantors of the …

**Ratio:** The liability of the guarantor and principal debtors are co-extensive, and the

…

**Reasoning:** The court reasoned that the money sought to be recovered came from the Personal

…

**Interpretation:** The interpretation of the law is that while guarantors are liable, the

…

**Application:** In this specific case, because the funds originated from the Personal

…

## Parties

- **Judges:** Prabhat…; V.G. B…
- **Appellants:** Creative Garments…
- **Respondents:** Dilip Chhabria…
- **Advocates:** A. K. M…; Yahya Bata…

## Timeline

- **2023-10-20 — Hearing…**: Order sheet of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

---

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/dilip-chhabria-design-pvt-ltd-02c18ed3