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

> NCLT judgment dated 2022-02-22. Citation: TCN-2022-NCLT-04017. Shapoorji Pallonji Finance Private Limited filed company petitions under Section 95 of the…

- **Court:** NCLT
- **Order date:** 22 Feb 2022
- **Citation:** TCN-2022-NCLT-04017
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shapoorji-pallonji-finance-pvt-ltd-vs-rekha-singh-ors-ia-no-229jpr2021-in-cp-no-26edee3d

## 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 IBC. The applications were based on the premise that since no CIRP was initiated against the corporate debtor, no insolvency application against the personal guarantor can be filed.

## Facts

Shapoorji Pallonji Finance Private Limited (Financial Creditor) extended a term loan of Rs. 25,00,00,000 to Jumbo Finvest (India) Limited (NBFC) under a facility agreement dated 27.03.2018. Ajay Kumar Singh, Siddharth Singh, and Rekha Singh acted as personal guarantors for the loan. 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 IBC against the personal guarantors. The personal guarantors filed applications seeking dismissal of the petitions, arguing that Jumbo Finvest, being an NBFC with assets below Rs. 500 crores, does not qualify as a 'Corporate Debtor' under IBC, and

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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 provides the framework for determining the Adjudicating Authority

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**Reasoning:** The NCLT relied on the NCLAT's interpretation of Section 60, emphasizing that the intent

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**Interpretation:** Section 60(1) of the IBC states that the NCLT having territorial jurisdiction

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**Application:** In this case, Jumbo Finvest (India) Limited, being an NBFC with assets below

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## Parties

- **Judges:** Deep Chand…; RAGHU N…; +1 more
- **Appellants:** Shapoorji…
- **Respondents:** Jumbo Finvest…; REKHA S…

## Timeline

- **2018-03-27 — Facility Ag…**: Date of the facility agreement between Shapoorji Pallonji Finance Private Limited and…
- **2020-09-01 — Default on Interest…**: Jumbo Finvest (India) Limited defaulted on interest payments for the months of September…

## 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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