# In the matter of Sanjay D Kanani vs. Kotak Mahindra Bank

> NCLT judgment dated 2024-04-18. Citation: TCN-2024-NCLT-01676. The application was filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016, read…

- **Court:** NCLT
- **Order date:** 18 Apr 2024
- **Citation:** TCN-2024-NCLT-01676
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sanjay-d-kanani-vs-kotak-mahindra-bank-3de8031b

## Summary

### Background

The application 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 IRP for Personal Guarantors to Corporate Debtor) Rules, 2019. Rutika Creations Pvt. Ltd. had executed a personal loan cum guarantee agreement of Rs.35,00,000/- with Kotak Mahindra Bank, with the applicant standing as a guarantor. The date of default of payment was 31.03.2018. Kotak Mahindra Bank issued a recall notice to the guarantor on 07.02.2018 and a demand notice on 07.03.2018. The Authority appointed a Resolution Professional (RP) on 26.07.2022, who filed a report on 08.12.2023 recommending the admission of the application.

## Facts

Rutika Creations Pvt. Ltd. executed a personal loan cum guarantee agreement of Rs. 35,00,000 with Kotak Mahindra Bank. Sanjaybhai D Kanani stood as a guarantor for this agreement. The date of default of payment was 31.03.2018. Kotak Mahindra Bank issued a recall notice to the guarantor on 07.02.2018 and a demand notice on 07.03.2018. The demand notice was addressed to Rutika Creation Pvt. Ltd. and Kiran Sanjaybhai Kanani, but not to Sanjaybhai D Kanani. Sanjaybhai D Kanani filed an application under Section 94(1) of the Insolvency and Bankruptcy Code, 2016. The Respondent argued that the Petitioner has suppressed information regarding cases filed by the Respondent under the Negotiable Instrument Act. The Resolution Professional (RP) filed a report recommending the

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## Issues and analysis

### Issue 1: Whether the application filed under Section 94 of the Insolvency and Bankruptcy Code, 2016 is …

**Ratio:** An application under Section 94 of the IBC is maintainable only if the guarantee has been

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**Reasoning:** The court found that the demand notice was not addressed to the applicant, Sanjaybhai D

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**Interpretation:** Section 94 of the IBC allows for the initiation of insolvency proceedings by a

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**Application:** Since the demand notice was not addressed to Sanjaybhai D Kanani, the guarantee

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## Parties

- **Judges:** Chitra Ha…; Velamur G Venkata…
- **Appellants:** Sanjay D…
- **Respondents:** Rutika Creations…; Kotak Mahindra…

## Timeline

- **2018-03-31 — Date of D…**: The date of default of payment for the…
- **2018-02-07 — Recall N…**: Kotak Mahindra Bank issued a…

## 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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