# In the matter of Indian Bank Vs. Rakesh Jolly, CP(IB)/573(ND)/2022

> NCLT judgment dated 2022-09-12. Citation: TCN-2022-NCLT-01100. Indian Bank filed an application under Section 95(1) read with Rule 7(2) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 12 Sept 2022
- **Citation:** TCN-2022-NCLT-01100
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/indian-bank-vs-rakesh-jolly-cp-dfe8d40f

## Summary

### Background

Indian Bank filed an application under Section 95(1) read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for IRP for Personal Guarantors to Corporate Debtor) Rules, 2019, to initiate the Insolvency Resolution Process against Shri Rakesh Jolly, who is the personal guarantor for M/s Aravali Infra Power Limited (the corporate debtor). The corporate debtor had existing facilities granted by a consortium of banks and applied for restructuring of its working capital facilities with Indian Bank. The bank sanctioned corporate debt restructuring facilities to M/s Aravali Infra Power Limited.

## Facts

Indian Bank filed an application to initiate the Insolvency Resolution Process against Shri Rakesh Jolly, the personal guarantor for M/s Aravali Infra Power Limited. Aravali Infra Power Limited, the corporate debtor, defaulted on its repayment obligations to Indian Bank, resulting in its accounts being classified as NPA on 29.10.2012. The total outstanding debt claimed by Indian Bank is Rs. 200,90,24,191.19/- as of 29.10.2012. Shri Rakesh Jolly, as the director of the corporate debtor, provided an unconditional and irrevocable guarantee for the repayment of the amounts due to the banks/lenders. The corporate debtor's accounts becoming NPA is a key fact that triggered the application under Section 95(1) of the IBC. The debt includes cash credit, WCTL, FITL-WC,

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## Issues and analysis

### Issue 1: Whether the application filed by Indian Bank under Section 95(1) of the IBC for initiating the …

**Ratio:** Section 95(1) of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the

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**Reasoning:** The court considered the applicant's submission that the corporate debtor defaulted on

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**Interpretation:** Section 95(1) provides a mechanism for creditors to initiate insolvency

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

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## Parties

- **Judges:** Sh. Dharminder…; SH. L. N.…
- **Appellants:** Indian…
- **Respondents:** M/s Aravali Infra…; Rakesh…
- **Advocates:** Amod K. D…

## Timeline

- **2012-10-29 — Accounts decl…**: The accounts of the Corporate Debtor, M/s Aravali Infra Power Limited, were declared…
- **2012-10-31 — Sanction…**: Indian Bank issued a sanction letter No. NDM/CDR/2012-13 sanctioning Corporate Debt…

## 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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