# In the matter of KSL and Industries Ltd.

> NCLT judgment dated 2023-11-10. Citation: TCN-2023-NCLT-00768. The case involves an application filed by Union Bank of India (erstwhile Andhra Bank) against…

- **Court:** NCLT
- **Order date:** 10 Nov 2023
- **Citation:** TCN-2023-NCLT-00768
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ksl-and-industries-ltd-77513116

## Summary

### Background

The case involves an application filed by Union Bank of India (erstwhile Andhra Bank) against the decision of the Resolution Professional (RP) of KSL & Industries Ltd, rejecting the bank's claim and not including it as a member of the Committee of Creditors (COC). The bank had extended loans to Krishna Knitwear Technology Ltd. and Eskay Knit India Ltd., with KSL & Industries Ltd. acting as a corporate guarantor. The bank claims that the RP's decision is unjust as assets mortgaged to the bank are being dealt with in the Resolution Plan without the bank's participation. The bank seeks rejection of the resolution plan.

## Facts

Union Bank of India (formerly Andhra Bank) extended loans to Krishna Knitwear Technology Ltd. and Eskay Knit India Ltd. KSL & Industries Ltd. acted as a corporate guarantor for these loans, providing a guarantee of Rs. 16 crores. When the principal borrowers defaulted, the bank's accounts became NPA in November and December 2015. The bank filed a claim of Rs. 76,25,34,655.55/- in the CIRP of KSL & Industries Ltd. The Resolution Professional (RP) rejected the claim, stating that the bank had not invoked the guarantee furnished by the Corporate Debtor. The RP also stated that the demand notice under Section 13(2) of the SARFAESI Act was not served to the Corporate Debtor in its capacity as guarantor. The bank had also initiated recovery proceedings under the

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) was justified in rejecting the claim of Union Bank of …

**Ratio:** The RP has a duty to verify and admit claims based on the evidence provided by the

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**Reasoning:** The RP rejected the bank's claim because the bank allegedly did not provide sufficient

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**Interpretation:** The RP's decision must be based on a reasonable assessment of the evidence and

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**Application:** The Tribunal will review the evidence and arguments presented by both parties

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## Parties

- **Judges:** Chitra Ha…; Velamur G Venkata…
- **Appellants:** Union Bank of…
- **Respondents:** KSL & Indu…; Kiran Shah RP of…
- **Advocates:** Rathina Maravarnan…; Karan San…; +1 more

## Timeline

- **2011-03-25 — Undertaking and…**: Corporate Debtor executed an undertaking and a…
- **2011-03-28 — Deposit of Tit…**: Corporate Debtor deposited original title…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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