# In the matter of Indian Overseas Bank vs. K.S. Chowdry

> NCLT judgment dated 2024-12-02. Citation: TCN-2024-NCLT-00119. The case involves an application filed by Indian Overseas Bank, the financial creditor, against…

- **Court:** NCLT
- **Order date:** 2 Dec 2024
- **Citation:** TCN-2024-NCLT-00119
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/indian-overseas-bank-vs-ks-chowdry-5141f54d

## Summary

### Background

The case involves an application filed by Indian Overseas Bank, the financial creditor, against Mr. K.S. Chowdry, the personal guarantor to the corporate debtor, M/s. RCM Infrastructure Ltd., under Section 123 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtor) Rules, 2019. The financial creditor sought to initiate a bankruptcy process against the personal guarantor due to defaults in payments. Prior to this application, the Applicant Bank had initiated proceedings under the SARFEASI Act, 2002, and filed an application before DRT-II Hyderabad against the Borrower and Personal Guarantors, which was allowed on

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## Facts

Indian Overseas Bank (IOB), the financial creditor, extended credit facilities to M/s. RCM Infrastructure Ltd., the corporate debtor. Mr. K.S. Chowdry stood as a personal guarantor for the credit limits sanctioned to the corporate debtor, as evidenced by a guarantee agreement dated 18.11.2023 and a guarantee deed dated 11.04.2014. Upon default by the corporate debtor, IOB initiated proceedings under the SARFEASI Act, 2002, and filed an application before DRT-II Hyderabad, which was allowed on 09.03.2020. IOB also issued a demand notice on 24.12.2021. Despite the demand notice, the default remained uncured, leading IOB to file an application under Section 95 of the IBC, 2016, seeking initiation of insolvency process against the personal guarantor. An interim moratorium

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## Issues and analysis

### Issue 1: Whether the Applicant/Creditor is entitled to proceed against the Respondent/Guarantor for …

**Ratio:** The ratio decidendi is based on the interpretation and application of Sections 121 and

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**Reasoning:** The Tribunal reasoned that the resolution process initiated against the personal

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**Interpretation:** The interpretation of Section 121 and 123 of the IBC is crucial. Section 121

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**Application:** The Tribunal applied the ratio and reasoning to the specific facts of the case.

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Indian Overseas…
- **Respondents:** M/S RCM Infrastruc…; Mr.K.S.Ch…

## Timeline

- **2020-03-09 — DRT Orde…**: The DRT allowed the application filed by the Applicant Bank against the Borrower and…
- **2021-12-24 — Demand N…**: Applicant bank issued Demand notice in Form B of IBC, 2016 for payment of the amount…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 123 — Application by creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-123)

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