# 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-04018. Shapoorji Pallonji Finance Private Limited filed company petitions under Section 95 of the…

- **Court:** NCLT
- **Order date:** 22 Feb 2022
- **Citation:** TCN-2022-NCLT-04018
- **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-f54204f8

## 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, and therefore, proceedings against the personal guarantors are not maintainable. The financial creditor argued that the contract of guarantee is also covered under the Contract Act, 1872, and that CIRP can be initiated against the personal guarantors irrespective of whether CIRP has

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## Facts

Shapoorji Pallonji Finance Private Limited (the Financial Creditor) filed company petitions under Section 95 of the Insolvency and Bankruptcy Code (IBC) against Ajay Kumar Singh, Siddharth Singh, and Rekha Singh (the Personal Guarantors). These individuals are personal guarantors to Jumbo Finvest (India) Limited, a Non-Banking Financial Company (NBFC). The Personal Guarantors had executed deeds of guarantee on 27.03.2018 in favor of the Financial Creditor, securing a term loan of Rs. 25,00,00,000/- advanced by the petitioner to Jumbo Finvest (India) Limited. Jumbo Finvest defaulted on interest payments for September and October 2020 and failed to repay the principal installment for the quarter ending September 2020. The Personal Guarantors filed applications seeking

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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 the judgment in Lalit Kumar Jain v. Union of India clarify that

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**Reasoning:** The NCLT relied on the interpretation of Section 60 of the IBC and the Supreme Court's

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**Interpretation:** Section 60 of the IBC provides the adjudicating authority for insolvency

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**Application:** In this case, the court found that Jumbo Finvest (India) Limited, being an NBFC

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## Parties

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

## Timeline

- **2018-03-27 — Deed of Gua…**: Ajay Kumar Singh, Siddharth Singh, and Rekha Singh entered into respective deeds of…
- **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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