# In the matter of M/s. MuthootFincorp Ltd Vs. P. M. Nargunam, IBA/805/2020

> NCLT judgment dated 2022-06-20. Citation: TCN-2022-NCLT-02168. The case involves an application filed by MuthootFincorp Limited, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 20 Jun 2022
- **Citation:** TCN-2022-NCLT-02168
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ms-muthootfincorp-ltd-vs-p-m-nargunam-iba8052020-543af281

## Summary

### Background

The case involves an application filed by MuthootFincorp Limited, the Financial Creditor, against P.M. Nargunam, the Personal Guarantor, under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016. The corporate debtor, Santosh Hospitals Private Limited, is under liquidation. An order admitting the Corporate Debtor into CIRP was passed on 04.04.2019, followed by an order for liquidation. An appeal against the liquidation order was dismissed on 14.02.2022.

## Facts

MuthootFincorp Limited, the Financial Creditor, filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against P.M. Nargunam, the Personal Guarantor, concerning a debt related to Santosh Hospitals Private Limited, the Corporate Debtor. The Corporate Debtor is under liquidation, with CIRP initiated on 04.04.2019 and a liquidation order passed subsequently. The date of default is stated as 01.08.2017. A demand notice was issued to the Personal Guarantor on 06.01.2020 under Rule 7(1) of the Insolvency and Bankruptcy Rules, 2019. The Financial Creditor inadvertently filed a consent affidavit from an Insolvency Resolution Professional and sought to strike it out.

## Issues and analysis

### Issue 1: Whether the application filed under Section 95(1) of the IBC, 2016 against the personal guarantor …

**Ratio:** Once an application under Section 95 of IBC, 2016 is filed, the Adjudicating Authority

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**Reasoning:** The NCLAT's decision in Ravi Ajit Kulkarni -Vs- State Bank of India clarifies the

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**Interpretation:** Section 95 of the IBC, 2016 mandates the Adjudicating Authority to initiate

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**Application:** The Adjudicating Authority is obligated to act upon the application filed by

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## Parties

- **Judges:** (Retd.) S.…; Anil Ku…
- **Appellants:** MUTHOOT FINCORP…
- **Respondents:** Santosh Hospitals…; P. M. Nar…

## Timeline

- **2017-08-01 — Date of D…**: The date of default as…
- **2019-04-04 — CIRP Init…**: Order admitting the Corporate…

## 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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