# In the matter of IFCI Ltd Vs. Mr. Sunder Lal Dugar, CP (IB)/317/(KB)/2021

> NCLT judgment dated 2022-02-17. Citation: TCN-2022-NCLT-04080. 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-04080
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ifci-ltd-vs-mr-sunder-lal-dugar-cp-557e8f7a

## Summary

### Background

The case involves an application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) read with rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019 and regulation 4(2) of IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, for initiating the Insolvency Resolution Process (IR Process) against a personal guarantor, Mr. Sunder Lal Dugar, who is one of the directors of EMC Limited (Corporate Debtor). The applicant, IFCI Limited, seeks to initiate insolvency proceedings against the personal guarantor due to the corporate debtor's failure to repay loans. The corporate debtor's account

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## Facts

IFCI Limited (the Applicant) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) against Mr. Sunder Lal Dugar (the Respondent), a personal guarantor to EMC Limited (the Corporate Debtor). The Applicant claims that the Corporate Debtor defaulted on loan repayments, leading to the account being classified as a Non-Performing Asset (NPA) on 30.09.2018. The Applicant extended various credit facilities to the Corporate Debtor based on representations made by the Corporate Debtor and the guarantor. A loan agreement was executed on 26/09/2014 and 23/03/2015. The Corporate Debtor failed to make payments as per the facility agreement. The Applicant issued a Demand Notice under Rule 7(1) of the Insolvency and Bankruptcy Rules, 2019, to

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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 initiate

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**Reasoning:** The court considered the application filed by IFCI Limited, the applicant, under Section

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**Interpretation:** Section 95(1) of the IBC is interpreted to provide a mechanism for creditors to

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**Application:** In this case, the applicant provided evidence of the corporate debtor's default

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** IFCI Li…
- **Respondents:** EMC Lim…; SUNDER LAL…

## Timeline

- **2018-09-30 — Account Classified as…**: The applicant classified the account of the Corporate Debtor as a non-performing asset…
- **2018-11-12 — Admission of Section 9…**: An application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by Beni…

## 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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