# In the matter of Stressed Asset Stabilization Fund Vs. Rajedra Prasad Tummala, CP (IB) No. 93/95/AMR/2020

> NCLT judgment dated 2022-02-25. Citation: TCN-2022-NCLT-03965. The case pertains to an application filed under Section 95 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 25 Feb 2022
- **Citation:** TCN-2022-NCLT-03965
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/stressed-asset-stabilization-fund-vs-rajedra-prasad-tummala-cp-93aa662f

## Summary

### Background

The case pertains to an application filed under Section 95 of the Insolvency and Bankruptcy Code, 2016, read with the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Process for Personal Guarantors to Corporate Debtors) Rules, 2019. The erstwhile Industrial Development Bank of India (IDBI) had granted term loans to Torus India Limited (Respondent No. 2). Mr. Kosaraju S. Ramarao (Respondent No. 1) executed personal guarantees in favor of IDBI Bank for these term loans. The Central Government constituted Stressed Assets Stabilization Fund (SASF) to acquire stressed assets of IDBI. IDBI transferred the facilities granted to Respondent No. 2 to SASF.

## Facts

IDBI granted term loans to Torus India Limited (Respondent No. 2). Mr. Kosaraju S. Ramarao (Respondent No. 1) provided personal guarantees for these loans. IDBI transferred these loans to Stressed Assets Stabilization Fund (SASF). Torus India Limited defaulted on the loan payments. SASF, as the financial creditor, filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, for initiating the insolvency resolution process against the personal guarantor. The application was deemed complete by the NCLT Amaravati Bench.

## Issues and analysis

### Issue 1: Whether the application under Section 95 of the Insolvency and Bankruptcy Code, 2016, is complete …

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Tribunal considered the facts presented and determined that there was no hurdle to

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**Interpretation:** Section 95 provides a mechanism for financial creditors to pursue insolvency

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**Application:** The Tribunal applied Section 95 to the facts of the case, noting that the

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Stressed Assets…
- **Respondents:** Torus India…; Mr.Kosaraju…

## Timeline

- **2004-09-24 — Trust De…**: The Central Government constituted Stressed Assets Stabilization Fund (SASF) by a Trust…
- **2004-09-30 — Transfer of Fa…**: IDBI transferred the facilities…

## 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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