# In the matter of IFCI Ltd Vs. Mr. Manoj Toshniwal, CP IB/319/KB/2021

> NCLT judgment dated 2022-02-17. Citation: TCN-2022-NCLT-04082. The case involves an application filed under Section 95(1) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 17 Feb 2022
- **Citation:** TCN-2022-NCLT-04082
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ifci-ltd-vs-mr-manoj-toshniwal-cp-ib319kb2021-c8307269

## Summary

### Background

The case involves an application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, read with related rules and regulations, to initiate the Insolvency Resolution Process against Mr. Manoj Toshniwal, a personal guarantor to the Corporate Debtor, EMC Limited. The applicant, IFCI Limited, is a company that extended various credit facilities to EMC Limited, which defaulted on its repayment obligations, leading to the account being classified as a non-performing asset. Prior to this application, EMC Limited was already undergoing a corporate insolvency resolution process initiated by an operational creditor, which later moved towards liquidation due to violations of the approved resolution plan.

## Facts

IFCI Limited extended credit facilities to EMC Limited (CCIL), with Mr. Manoj Toshniwal acting as a personal guarantor. CCIL defaulted on its repayment obligations under the loan agreement executed on 2014-09-26 and 2015-03-23. IFCI classified CCIL's account as a non-performing asset (NPA) on 2018-09-30. Subsequently, IFCI issued a demand notice under Rule 7(1) of the relevant rules. Prior to this, an operational creditor initiated a corporate insolvency resolution process against EMC Limited, which was admitted on 2018-11-12. Although a resolution plan was approved, an application for liquidation was later filed due to violations of the plan. IFCI then filed an application under Section 95(1) of the IBC, 2016, to initiate the insolvency resolution process against Mr.

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## Issues and analysis

### Issue 1: Whether the application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, for …

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

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**Reasoning:** The court considered the factual matrix, including the defaults by the Corporate Debtor

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

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**Application:** The court applied Section 95(1) to the facts of the case, noting that EMC

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** IFCI Li…
- **Respondents:** EMC Lim…; Manoj Tos…

## Timeline

- **2014-09-26 — Loan Agreement…**: Deed of loan agreement executed…
- **2015-03-23 — Loan Agreement…**: Deed of loan agreement executed…

## 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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