# In the matter of Stressed Asset Stabilization Fund Vs. NHC Siva Reddy, CP (IB) No. 215/95/HDB/2022

> NCLT judgment dated 2023-04-10. Citation: TCN-2023-NCLT-03884. The case involves a petition filed by M/s. Stressed Assets Stabilization Fund (SASF) under…

- **Court:** NCLT
- **Order date:** 10 Apr 2023
- **Citation:** TCN-2023-NCLT-03884
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/stressed-asset-stabilization-fund-vs-nhc-siva-reddy-cp-2b07737b

## Summary

### Background

The case involves a petition filed by M/s. Stressed Assets Stabilization Fund (SASF) under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Insolvency Resolution Process (IR Process) against Sri. N H Siva Mohan Reddy, the Personal Guarantor of M/s. Vishnupriya Industries Limited (In Liquidation). The Corporate Debtor had availed financial assistance from the Financial Creditor and its Associate Banks. The Personal Guarantor stood as guarantor for the loans. The Corporate Debtor defaulted on payments, leading to the financial creditor filing an O.A before Hon'ble DRT. The Hon'ble High Court of Andhra Pradesh ordered for winding up of the corporate debtor and appointed the liquidator. The petitioner issued a demand notice to the

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## Facts

M/s. Stressed Assets Stabilization Fund (SASF) filed a petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against Sri. N H Siva Mohan Reddy, the Personal Guarantor of M/s. Vishnupriya Industries Limited (In Liquidation). Vishnupriya Industries Limited had availed financial assistance from SASF and its associate banks, with Sri. N H Siva Mohan Reddy and Shri R Nagi Reddy acting as guarantors under guarantee agreements dated 15.09.1999 and 24.09.1997. Loan recall letters were issued to the Corporate Debtor and Personal Guarantors in 2004 and 2006. The Corporate Debtor defaulted on payments, leading to an O.A filed before the Hon'ble DRT, which directed the corporate debtor and guarantors to pay the amount. The Hon'ble High Court of Andhra Pradesh

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## Issues and analysis

### Issue 1: Whether an Insolvency Resolution Process can be ordered against the Personal Guarantor under …

**Ratio:** Section 95 and Section 100 of the Insolvency and Bankruptcy Code, 2016, read with the

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**Reasoning:** The Adjudicating Authority considered the application, the report of the Resolution

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**Interpretation:** Section 100 of the IBC allows for the admission of an application to initiate

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**Application:** In this case, the Adjudicating Authority found that the application met the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Stressed Assets…
- **Respondents:** Vishnupriya…; NHC Siva Mohan…

## Timeline

- **1997-09-24 — Guarantee Ag…**: Guarantee agreement between Shri R Nagi…
- **1999-06-30 — Sanction…**: Sanction Letter issued by Industrial Development Bank of India (Now assigned to Stressed…

## 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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