# In the matter of M P Sakthivel

> NCLT judgment dated 2024-02-23. Citation: TCN-2024-NCLT-02431. The application has been filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 23 Feb 2024
- **Citation:** TCN-2024-NCLT-02431
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/m-p-sakthivel-7251ca07

## Summary

### Background

The application has been filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 ('Code'/ 'IBC') read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019 ('Rules') by the Applicant/ Personal Guarantor Mr. M P Sakthivel. The prayer is to initiate the Insolvency Resolution Process in respect of Mr. M P Sakthivel, the Personal Guarantor for M/s. KMP Spinners Private Limited ('Corporate Debtor'). M/s. KMP Spinners Private Limited had taken credit facilities from Indian Overseas Bank and Aditya Birla Finance Limited. The Applicant had given personal guarantee to the said loan. The Corporate Debtor failed to repay the debt, leading to the

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## Facts

Mr. M P Sakthivel, the applicant, filed an application under Section 94(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process as a Personal Guarantor to M/s. KMP Spinners Private Limited, the Corporate Debtor. M/s. KMP Spinners Private Limited had taken credit facilities from Indian Overseas Bank and Aditya Birla Finance Limited, for which Mr. Sakthivel had provided a personal guarantee. The Corporate Debtor defaulted on the loan repayment. The amount of default to Indian Overseas Bank is Rs.24,31,81,344/- as of 30.06.2019, and to Aditya Birla Finance Limited is Rs.6,94,34,457/- as of 28.08.2019. The applicant has proposed Mr. Madhu Desikan as the Resolution Professional. The court verified the AFA status of the proposed

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## Issues and analysis

### Issue 1: Whether the application filed by the personal guarantor under Section 94(1) of the IBC is …

**Ratio:** Section 94 of the IBC provides that a debtor may apply either by himself, or jointly with

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**Reasoning:** The court observed that the Personal Guarantor himself moved the application for

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**Interpretation:** Section 94(1) of the IBC allows a debtor, including a personal guarantor, to

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**Application:** In this case, the applicant, Mr. M P Sakthivel, being the personal guarantor to

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## Parties

- **Judges:** JYOTI KUMAR…; RAVICHANDRAN…
- **Appellants:** Mr.M P Sak…
- **Respondents:** M/s. KMP Spinners…

## Timeline

- **2019-06-30 — Date of Default to…**: The Corporate Debtor defaulted on loan repayment to Indian Overseas Bank. The amount of…
- **2019-08-28 — Date of Default to…**: The Corporate Debtor defaulted on loan repayment to Aditya Birla Finance Limited. The…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 94(1) — Application by debtor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-94)

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