# In the matter of S. Chandra vs. Tamilnadu Mercantile Bank Limited

> NCLT judgment dated 2024-08-30. Citation: TCN-2024-NCLT-00706. The petition was filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016, read…

- **Court:** NCLT
- **Order date:** 30 Aug 2024
- **Citation:** TCN-2024-NCLT-00706
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/s-chandra-vs-tamilnadu-mercantile-bank-limited-0f1f8638

## Summary

### Background

The petition was filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016, read with Rule 6(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019. The prayer is to initiate the Insolvency Resolution Process against Ms. S. Chandra, the Personal Guarantor, for an amount of Rs. 8,30,59,218.13 together with interest. The date of default was specified as 30.12.2023. The petition was filed before the Tribunal on 06.02.2024. The applicant had stood as personal guarantor in respect of the loans availed by Ommeena Pharma Distributors Private Limited. The Respondent is Tamilnad Merchantile Bank Limited. The applicant has proposed Madhu Desikan as the

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## Facts

Mrs. S Chandra, residing at Flat No. 108, B Block, ETA Verde, No. 6 Arcot Road, Porur, Chennai, 600116, stood as a personal guarantor for loans availed by Ommeena Pharma Distributors Private Limited. Tamilnad Merchantile Bank Limited, Chennai Mount Road Branch, is the creditor. The Corporate Debtor defaulted in payment, leading to the loan account being classified as a Non-Performing Asset (NPA) as on 30.12.2023. The bank issued a demand notice on 12.01.2024 under Section 13(2) of the SARFAESI Act, 2002, directing repayment of Rs. 8,30,59,218.13. The personal guarantor filed an application under Section 94(1) of the Insolvency and Bankruptcy Code, 2016, on 06.02.2024. The applicant also furnished his Statement of Affairs as on 31.01.2024 to the tune of

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## Issues and analysis

### Issue 1: Whether the application filed by the Personal Guarantor under Section 94 of the IBC, 2016 is …

**Ratio:** Section 94 of the IBC, 2016 allows a debtor to

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**Reasoning:** The Tribunal considered the submissions and the report of the IRP and found that the

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**Interpretation:** Section 94 provides an avenue for personal guarantors to initiate insolvency

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**Application:** The applicant, being a personal guarantor, was eligible to file the application

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** S Cha…
- **Respondents:** Ommeena Pharma…; TamilNadu…
- **Advocates:** A. S. Sathish…; A.G. Sathyanarayan…

## Timeline

- **2023-12-30 — Date of D…**: The Date of Default, as specified in…
- **2024-01-12 — Demand Notice…**: The bank issued a demand notice to the corporate debtor as well as the guarantors on…

## 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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