# In the matter of HDFC Bank Limited vs. Neelam Chandra Parkash

> NCLT judgment dated 2024-09-23. Citation: TCN-2024-NCLT-00569. This case involves an application filed by HDFC Bank Limited under Section 95 of the Insolvency…

- **Court:** NCLT
- **Order date:** 23 Sept 2024
- **Citation:** TCN-2024-NCLT-00569
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/hdfc-bank-limited-vs-neelam-chandra-parkash-a3b4fcf7

## Summary

### Background

This case involves an application filed by HDFC Bank Limited under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Personal Guarantor's Insolvency Resolution Process (PGIRP) against Mrs. Neelam Chandra Parkash, who furnished a personal guarantee for credit facilities extended to Esskay Motors Pvt Ltd (the Corporate Debtor). The application stems from defaults in repayment of debt by the Corporate Debtor, leading to the invocation of the personal guarantee. The Resolution Professional's report recommended admitting the Respondent-Personal Guarantor into PGIRP.

## Facts

HDFC Bank Limited granted credit facilities to Esskay Motors Pvt Ltd (Corporate Debtor) vide sanction letter dated 23.05.2014. Mrs. Neelam Chandra Parkash furnished a personal guarantee for these facilities. The Corporate Debtor defaulted in repayment, leading HDFC Bank to invoke the personal guarantee via a letter dated 04.05.2016. A settlement agreement was executed on 10.03.2017 between the Creditor, Corporate Debtor, and Guarantors, including Mrs. Parkash, but the Corporate Debtor continued to default. A cheque issued by the Corporate Debtor on 24.03.2017 was dishonored. HDFC Bank issued a demand notice to Mrs. Parkash on 09.01.2020, to which she replied on 20.01.2020. The Corporate Debtor was admitted into liquidation under Section 33(1) of the Code on 08.01.2018.

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## Issues and analysis

### Issue 1: Whether the personal guarantee furnished …

**Ratio:** The principle is that a personal guarantee is a separate and independent contract from

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**Reasoning:** The court found that the Creditor invoked the personal guarantee furnished by the

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**Interpretation:** The interpretation is that the invocation of the personal guarantee creates a

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**Application:** The court applied this principle to the facts by noting that the Creditor

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## Parties

- **Judges:** ANIL RAJ C…; Kuldip Kumar…
- **Appellants:** HDFC Bank L…
- **Respondents:** Esskay Motors Pvt…; Neelam Chandra…

## Timeline

- **2014-05-23 — Sanction…**: HDFC Bank granted credit…
- **2014-07-12 — Loan Agre…**: Loan Agreement executed between HDFC…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95 — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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