# In the matter of Indian Bank vs. K. Shanmugham

> NCLT judgment dated 2024-12-09. Citation: TCN-2024-NCLT-00084. Indian Bank filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 9 Dec 2024
- **Citation:** TCN-2024-NCLT-00084
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/indian-bank-vs-k-shanmugham-9bb0fe02

## Summary

### Background

Indian Bank filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, against Mr. K Shanmugham, the personal guarantor of M/s Yashica Electronics Pvt. Ltd., for initiating the insolvency resolution process. The default amount is INR 1,29,14,561/-, with the date of default being 29.03.2019. The application was filed on 23.01.2024.

## Facts

Indian Bank, the Financial Creditor, filed an application CP(IB)/63(CHE)/2024 under Section 95 of the Insolvency and Bankruptcy Code, 2016, against Mr. K Shanmugham, the personal guarantor of M/s Yashica Electronics Pvt. Ltd., the Corporate Debtor. The Corporate Debtor defaulted in repayment, and its account was classified as NPA on 29.03.2019. The date of default is 29.03.2019, with a default amount of INR 1,29,14,561/-. The Financial Creditor had granted various credit facilities to the Corporate Debtor, including an open cash credit limit of Rs.140 lakhs, a working capital term loan limit of Rs.35.74 lakhs, and a funded interest term loan of Rs.10.96 lakhs, vide sanction letter dated 28.03.2019. The guarantor entered into an agreement of guarantee with Indian Bank

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## Issues and analysis

### Issue 1: Whether the application filed by Indian Bank under Section 95 of the Insolvency and Bankruptcy …

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016, allows a creditor to initiate

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**Reasoning:** The Tribunal observed that the Corporate Debtor had defaulted in repayment, and Mr. K

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**Interpretation:** Section 95 provides a mechanism for creditors to recover debts from personal

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**Application:** The Tribunal applied Section 95 to the facts of the case, noting that Mr. K

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** Indian…
- **Respondents:** M/s Yashica…; K Shanm…

## Timeline

- **2019-03-28 — Sanction Lett…**: Financial Creditor sanctioned credit…
- **2019-03-29 — Date of D…**: The Corporate Debtor defaulted in repayment, and the guarantor entered into an agreement…

## 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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