# In the matter of Pridhvi Assets Reconstruction and Securitization Company Ltd Vs. Kongara Naveen (Sri Pavana Keerthi Hotels India Pvt Ltd), CP (IB)/197/95/HDB/2022

> NCLT judgment dated 2023-06-14. Citation: TCN-2023-NCLT-02958. The case involves a petition filed by Pridhvi Asset Reconstruction and Securitisation Company…

- **Court:** NCLT
- **Order date:** 14 Jun 2023
- **Citation:** TCN-2023-NCLT-02958
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pridhvi-assets-reconstruction-and-securitization-company-ltd-vs-kongara-naveen-31ca428a

## Summary

### Background

The case involves a petition filed by Pridhvi Asset Reconstruction and Securitisation Company Ltd. against Mr. Kongara Naveen, the personal guarantor of Sri Pavana Keerthi Hotels India Private Limited, seeking initiation of the Insolvency Resolution Process (IRP) under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016. The petitioner, acting as a financial creditor, claims that the corporate debtor defaulted on its obligations under a Composite Deed of Hypothecation. The petitioner had sanctioned working capital facilities to the corporate debtor, which later faced financial difficulties. The erstwhile Andhra Bank assigned the debt portfolio to the financial creditor. The personal guarantor executed a Deed of Guarantee, which was invoked by the financial

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## Facts

Pridhvi Asset Reconstruction and Securitisation Company Ltd. (Petitioner) filed a petition against Mr. Kongara Naveen (Respondent No.1), the personal guarantor of Sri Pavana Keerthi Hotels India Private Limited (Respondent No.2/Corporate Debtor), under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016. The Petitioner had sanctioned working capital facilities to the Corporate Debtor, with a limit of Rs. 19.28 crores, repayable in monthly installments. The Corporate Debtor defaulted on its obligations under a Composite Deed of Hypothecation. The loan account was classified as NPA on 29.09.2015. The bank recalled the term loan and filed OA 403 of 2017 before the DRT Hyderabad-1, which granted a decree on 09.02.2019. The erstwhile Andhra Bank assigned the debt

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## Issues and analysis

### Issue 1: Whether an Insolvency Resolution Process can be ordered against the Personal Guarantor under …

**Ratio:** The ratio is based on the interpretation of Section 100 of the IBC, read with other

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**Reasoning:** The Tribunal reasoned that the personal guarantor failed to repay the amount due despite

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**Interpretation:** The interpretation involves understanding the scope and applicability of

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**Application:** The ratio and reasoning were applied to the specific facts of the case,

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** PRIDHVI ASSET…
- **Respondents:** Pavana Keerthi…; Kongara N…

## Timeline

- **2014-09-20 — Sanction…**: Petitioner sanctioned working…
- **2014-10-06 — Term (Composite)…**: Date of the Term…

## 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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