# In the matter of Ratan Lal Jain vs. HDFC Bank & Anr.

> NCLT judgment dated 2024-03-12. Citation: TCN-2024-NCLT-02098. The application is filed under Section 94 of the Insolvency and Bankruptcy Code, 2016, read…

- **Court:** NCLT
- **Order date:** 12 Mar 2024
- **Citation:** TCN-2024-NCLT-02098
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ratan-lal-jain-vs-hdfc-bank-anr-43e92dfd

## Summary

### Background

The application is filed under Section 94 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, by Rattan Lal Jain, the Applicant/Personal Guarantor. The applicant seeks to initiate the Insolvency Resolution Process as a personal guarantor for M/s Namokar Strips Pvt. Ltd. ('Corporate Debtor'). During 2013-17, the Corporate Debtor incurred losses due to business failures and failure to repay debts. The applicant, along with the Directors of the Corporate Debtor, entered into transactions with multiple creditors, availing inter-corporate loans and credit facilities from HDFC Bank, where the applicant

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## Facts

Rattan Lal Jain, acting as a personal guarantor for M/s Namokar Strips Pvt. Ltd. (the Corporate Debtor), filed an application under Section 94 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process. The Corporate Debtor incurred losses between 2013 and 2017, leading to a failure to repay debts. HDFC Bank issued a notice under Section 13(2) of the SARFAESI Act, 2002, against the Corporate Debtor and its personal guarantors, including Rattan Lal Jain. The Income Tax Department also issued a notice under Section 148A of the Income Tax Act, 1961. The total default amount was stated as Rs. 3,42,49,899/-, including Rs. 2,58,49,899/- against HDFC Bank and Rs. 84,00,000/- for the Income Tax Department. The application was filed in

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## Issues and analysis

### Issue 1: Whether the application filed by the personal guarantor, Rattan Lal Jain, under Section 94 of the …

**Ratio:** Section 94 of the Insolvency and Bankruptcy Code, 2016, allows a debtor to apply for

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**Reasoning:** The court observed that the application was filed by the personal guarantor in the

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**Interpretation:** Section 94 of the IBC provides a mechanism for personal guarantors to initiate

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**Application:** The court found that the application met the prima facie requirements of

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** RATTAN LA…
- **Respondents:** M/s Namokar…; HDFC BANK…

## Timeline

- **2013-01-01 — Corporate Debtor…**: During the period of 2013-17, the Corporate Debtor incurred losses owing to massive…
- **2016-02-01 — SARFAESI Notic…**: HDFC Bank issued a notice under Section 13(2) of SARFAESI Act, 2002 against the Corporate…

## Legal provisions

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

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