# In the matter of Indian SME Asset Reconstruction Company vs. M. Kalaiselvi

> NCLT judgment dated 2024-11-28. Citation: TCN-2024-NCLT-00141. The case involves an application filed by Indian SME Asset Reconstruction Company under Section…

- **Court:** NCLT
- **Order date:** 28 Nov 2024
- **Citation:** TCN-2024-NCLT-00141
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/indian-sme-asset-reconstruction-company-vs-m-kalaiselvi-a53b32fb

## Summary

### Background

The case involves an application filed by Indian SME Asset Reconstruction Company under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against the personal guarantor, Smt. M. Kalaiselvi, of M/s Mahan Textiles Process India Private Limited, the Corporate Debtor. The Corporate Debtor had taken credit facilities from the Applicant, and the Respondent had given a personal guarantee for the loan. The Corporate Debtor defaulted on the loan repayment, leading the Applicant to initiate CIRP against the Personal Guarantor.

## Facts

Indian SME Asset Reconstruction Company filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Smt. M. Kalaiselvi, the personal guarantor of M/s Mahan Textiles Process India Private Limited, the Corporate Debtor. The Corporate Debtor had availed credit facilities from the Applicant, and Smt. M. Kalaiselvi had provided a personal guarantee for the loan. The Corporate Debtor defaulted on the repayment of the debt, which amounted to Rs. 23,94,33,957 as of 31.01.2024. The date of default was 04.12.2012. The Applicant has placed on record the Deed of Guarantee dated 08.08.2008, Invocation of Guarantee dated 04.12.2012, Notice under Section 13(2) of the SARFAESI Act, 2002 dated 28.12.2012,

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## Issues and analysis

### Issue 1: Whether the application filed by the creditor under Section 95(1) of the Insolvency and Bankruptcy …

**Ratio:** Section 95 of the IBC allows a creditor to apply for initiating an Insolvency Resolution

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**Reasoning:** The court considered the averments made in the application, including the details of the

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

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**Application:** The Applicant, Indian SME Asset Reconstruction Company, has filed the

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** Indian SME Asset…
- **Respondents:** M/s Mahan…; M Kalai…

## Timeline

- **2008-08-08 — Deed of Gua…**: Deed of Guarantee was…
- **2012-12-04 — Invocation of…**: Guarantee was…

## 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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