# 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-03878. The case pertains to a petition filed by M/s. Stressed Assets Stabilization Fund (SASF) under…

- **Court:** NCLT
- **Order date:** 10 Apr 2023
- **Citation:** TCN-2023-NCLT-03878
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/stressed-asset-stabilization-fund-vs-nhc-siva-reddy-cp-6dafb57b

## Summary

### Background

The case pertains to 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 various Financial Assistance from the Financial Creditor and its Associate Banks. The Personal Guarantor stood as a guarantor under different loan documents. The Corporate Debtor defaulted on payments, leading the Financial Creditor to file an O.A before Hon'ble DRT, which directed the corporate debtor and the guarantors to pay the amount within 30 days. Subsequently, Hon'ble Recovery officers issued

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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, to initiate the Insolvency Resolution Process against Sri. N H Siva Mohan Reddy, the Personal Guarantor of M/s. Vishnupriya Industries Limited (In Liquidation). Vishnupriya Industries Limited, the Corporate Debtor, availed financial assistance from SASF and its associate banks. Sri. N H Siva Mohan Reddy and Shri R Nagi Reddy stood as guarantors, with guarantee agreements dated 15.09.1999 and 24.09.1997. The Financial Creditors issued Loan Recall letters to the Corporate Debtor and Personal Guarantors. The Corporate Debtor defaulted on payments. SASF filed an O.A before Hon'ble DRT, which directed the Corporate Debtor and guarantors to pay the

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## Issues and analysis

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

**Ratio:** Section 100 of the Insolvency and Bankruptcy Code, 2016, allows for the initiation of the

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

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**Interpretation:** The interpretation of Section 100, read with Section 95, is that if the

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**Application:** In this case, the Financial Creditor demonstrated that the Personal Guarantor

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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 Agreements…
- **1999-06-30 — Sanction…**: Sanction Letter issued by…

## 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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