# In the matter of JM Financial Asset Reconstruction Co Ltd Vs. Mathew Jhon, CP (IBC)/17/KOB/2021

> NCLT judgment dated 2022-03-17. Citation: TCN-2022-NCLT-03674. The petitions were filed by JM Financial Asset Reconstruction Company Limited under Section…

- **Court:** NCLT
- **Order date:** 17 Mar 2022
- **Citation:** TCN-2022-NCLT-03674
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/jm-financial-asset-reconstruction-co-ltd-vs-mathew-jhon-cp-0ddb2215

## Summary

### Background

The petitions were filed by JM Financial Asset Reconstruction Company Limited under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, against Mrs. Reena Paul, Mr. John Zachariah, Mrs. Annu Mathew, Mr. Mathew John, and Mr. K. G. Paul, who are personal guarantors of the Corporate Debtor, M/s. Unitek Power Solutions India Limited. The corporate debtor had availed credit facilities from Federal Bank Limited and defaulted on payments, leading to the account being classified as a non-performing asset. The creditor sought to initiate Corporate Insolvency Resolution Process (CIRP)

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## Facts

M/s. JM Financial Asset Reconstruction Company Limited filed petitions against Mrs. Reena Paul, Mr. John Zachariah, Mrs. Annu Mathew, Mr. Mathew John, and Mr. K. G. Paul, who are personal guarantors to the Corporate Debtor M/s. Unitek Power Solutions India Limited. Unitek Power Solutions India Limited availed credit facilities from the Federal Bank Limited. The amount of default was Rs. 38,56,65,007.80 as on 31.05.2021. The Corporate Debtor failed to make good its debt obligations, and the account was classified as NPA on 31.03.2011. The loans were secured by properties belonging to the guarantors. The guarantors undertook to unconditionally pay the Bank on demand, with their liability limited to Rs. 18,00,00,000. The financial assets of the Corporate Debtor were

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## Issues and analysis

### Issue 1: Whether the application filed by the Petitioner/Creditor under Section 95(1) of the Insolvency and …

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

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**Reasoning:** The Tribunal noted that the petitions were filed under the correct provisions of the IBC

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**Interpretation:** The legal framework allows creditors to pursue insolvency proceedings against

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**Application:** The Tribunal found that the petitioner had followed the correct legal

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## Parties

- **Judges:** Ashok Kumar…; Anil Ku…
- **Appellants:** M/s. JM Financial…
- **Respondents:** M/s. Unitek Power…; Reena…

## Timeline

- **2011-03-31 — Account Classified as…**: The account of M/s. Unitek Power Solutions India Limited was classified as a…
- **2013-03-26 — Assignment Ag…**: The financial assets of the Corporate Debtor were assigned by the Federal Bank Ltd. to…

## 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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