# In the matter of Jammu and Kashmir Bank Limited vs. Kanumuru Bharat

> NCLT judgment dated 2024-11-18. Citation: TCN-2024-NCLT-00214. The case involves a petition filed by Jammu and Kashmir Bank Limited (Financial Creditor) under…

- **Court:** NCLT
- **Order date:** 18 Nov 2024
- **Citation:** TCN-2024-NCLT-00214
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/jammu-and-kashmir-bank-limited-vs-kanumuru-bharat-c05afbf7

## Summary

### Background

The case involves a petition filed by Jammu and Kashmir Bank Limited (Financial Creditor) under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Personal Insolvency Resolution Process against Mr. Kanumuru Bharat, the Personal Guarantor of M/s. Ind-Barath Energy (Utkal) Limited (Corporate Debtor). The Corporate Debtor had availed credit facilities from a consortium of banks, including the petitioner, and the personal guarantor had executed a guarantee agreement. The Corporate Debtor defaulted, leading to CIRP initiation and approval of a resolution plan. The Financial Creditor then invoked the guarantee and filed the petition when the guarantor failed to pay.

## Facts

M/s. Ind-Barath Energy (Utkal) Limited (Corporate Debtor) availed credit facilities of Rs. 429.22 crores from a consortium of banks, including Jammu & Kashmir Bank Limited (Financial Creditor). Mr. Kanumuru Bharat (Personal Guarantor) provided a guarantee for the loan. The Corporate Debtor defaulted on 31.12.2014. Bank of Baroda initiated CIRP against the Corporate Debtor under Section 7 of the IBC, which was admitted on 29.08.2018. A resolution plan for the Corporate Debtor was approved on 25.07.2022. The Financial Creditor issued a demand notice to the Personal Guarantor on 09.07.2021, seeking payment of Rs. 26,43,82,869/-. The Personal Guarantor responded on 22.07.2021, claiming the notice was barred by limitation. The Financial Creditor filed a petition under

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## Issues and analysis

### Issue 1: Whether the liability of the Personal Guarantor is discharged upon the approval of the Resolution …

**Ratio:** The approval of a resolution plan for the Corporate Debtor does not automatically

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**Reasoning:** The court relied on precedents such as State Bank of India v. Ghanshyam Surajbali Kurmi

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**Interpretation:** The interpretation of Section 134 of the Indian Contract Act and Section 31 of

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**Application:** In this case, the resolution plan explicitly preserved the rights of the

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Jammu & Kashmir…
- **Respondents:** Ind-Barath Energy…; Kanumuru…

## Timeline

- **2014-12-31 — Corporate Debto…**: M/s. Ind-Barath Energy (Utkal) Limited…
- **2018-08-29 — CIRP Init…**: Bank of Baroda filed CP No.276/7/HDB/2018 under Section 7 of the IBC, 2016, which was…

## 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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