# In the matter of RARE Asset Reconstruction Ltd. vs. Sukesh Gupta

> NCLT judgment dated 2023-03-31. Citation: TCN-2023-NCLT-03908. The case pertains to an application filed by Rare Asset Reconstruction Limited, the Financial…

- **Court:** NCLT
- **Order date:** 31 Mar 2023
- **Citation:** TCN-2023-NCLT-03908
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rare-asset-reconstruction-ltd-vs-sukesh-gupta-13899935

## Summary

### Background

The case pertains to an application filed by Rare Asset Reconstruction Limited, the Financial Creditor, 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 Debtor) Rules, 2019, seeking initiation of the Insolvency Resolution Process against Sukesh Gupta, the Personal Guarantor of M/s. MBS Impex Private Limited, the Corporate Debtor. The Corporate Debtor had availed working capital facilities from ICICI Bank, and Sukesh Gupta stood as guarantor, executing guarantee agreements dated 09.02.2011. ICICI Bank assigned its rights to the Financial Creditor on 26.08.2022. The Financial Creditor issued a

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## Facts

M/s. MBS Impex Private Limited (Corporate Debtor) availed working capital facilities from ICICI Bank. Shri Sukesh Gupta acted as the personal guarantor for these facilities, executing guarantee agreements on 09.02.2011. ICICI Bank later assigned its rights and interests to Rare Asset Reconstruction Limited (Financial Creditor) on 26.08.2022. The Corporate Debtor defaulted on the repayment of the financial assistance. The outstanding debt as of 29.11.2021 was Rs. 49,95,98,391.27. The Financial Creditor issued a demand notice to the personal guarantor on 17.12.2021, but the guarantor failed to pay the outstanding amounts. The Financial Creditor then filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Insolvency

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## Issues and analysis

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

**Ratio:** Section 100 of the Insolvency and Bankruptcy Code, 2016, allows for the initiation of the

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**Reasoning:** The Adjudicating Authority considered the report of the Resolution Professional, which

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**Interpretation:** Section 95 and 100 of the IBC, 2016 are interpreted to allow for the initiation

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**Application:** The Adjudicating Authority applied the provisions of Section 100 of the Code to

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** RARE Asset…
- **Respondents:** M/s.MBS Impex…; Sukesh…
- **Advocates:** Dishit Bhattacharj…; Herur Rajes…

## Timeline

- **2011-02-09 — Guarantee Agr…**: Sukesh Gupta executed guarantee agreements for the working capital facilities availed by…
- **2021-12-17 — Demand N…**: Rare Asset Reconstruction Limited issued a demand notice to Sukesh Gupta for the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95(1) — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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