# In the matter of Shapoorji Pallonji Finance Private Limited Vs. Rekha Singh IA No. 229/JPR/2021 In CP No. (lB) 25/95/JPR/2021

> NCLT judgment dated 2022-02-22. Citation: TCN-2022-NCLT-04011. Shapoorji Pallonji Finance Private Limited filed company petitions under Section 95 of the…

- **Court:** NCLT
- **Order date:** 22 Feb 2022
- **Citation:** TCN-2022-NCLT-04011
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shapoorji-pallonji-finance-private-limited-vs-rekha-singh-ia-no-229jpr2021-in-cp-7d6f6563

## Summary

### Background

Shapoorji Pallonji Finance Private Limited filed company petitions under Section 95 of the Insolvency and Bankruptcy Code (IBC) against Ajay Kumar Singh, Siddharth Singh, and Rekha Singh, who are personal guarantors to Jumbo Finvest (India) Limited. The personal guarantors filed applications seeking dismissal of the company petitions, arguing that Jumbo Finvest, being a Non-Banking Financial Company (NBFC) with assets below Rs. 500 crores, does not qualify as a 'Corporate Debtor' under the IBC. The applications were filed under Section 60(5) of the IBC read with Rule 49 of the NCLT Rules, 2016.

## Facts

Shapoorji Pallonji Finance Private Limited (the Financial Creditor) advanced a term loan of Rs. 25,00,00,000/- to Jumbo Finvest (India) Limited (the Principal Borrower), a Non-Banking Finance Company (NBFC), under a facility agreement dated 27.03.2018. The loan was secured by personal guarantees from Ajay Kumar Singh, Siddharth Singh, and Rekha Singh. Jumbo Finvest defaulted on interest payments for September and October 2020 and failed to repay the principal installment for the quarter ending September 2020. Shapoorji Pallonji Finance Private Limited filed company petitions under Section 95 of the IBC against the personal guarantors. The personal guarantors filed applications seeking dismissal of the petitions, arguing that Jumbo Finvest, being an NBFC with assets

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## Issues and analysis

### Issue 1: Whether CIRP can be initiated against any Personal Guarantor(s) to a Corporate Debtor before …

**Ratio:** Section 60 of the IBC and related case laws clarify that CIRP can be initiated against a

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**Reasoning:** The NCLT relied on the interpretation of Section 60 of the IBC and the NCLAT's order in

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**Interpretation:** Section 60 of the IBC outlines the jurisdiction for insolvency resolution and

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**Application:** In this case, since Jumbo Finvest (India) Limited does not qualify as a

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## Parties

- **Judges:** Deep Chand…; RaghuNa…
- **Appellants:** Shapoorji…
- **Respondents:** Jumbo Finvest…; REKHA S…

## Timeline

- **2018-03-27 — Facility Agree…**: Date of the facility agreement between Shapoorji Pallonji Finance Private Limited and…
- **2020-09-01 — Default on Interest…**: Jumbo Finvest failed to make interest payments for the months of September 2020 & October…

## 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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