# In the matter of Stressed Asset Stabilization Fund Vs. Shashi Aggarwal, CP (IB)/196/2022

> NCLT judgment dated 2022-10-19. Citation: TCN-2022-NCLT-00677. The case involves a petition filed by Stressed Assets Stabilization Fund (Financial Creditor)…

- **Court:** NCLT
- **Order date:** 19 Oct 2022
- **Citation:** TCN-2022-NCLT-00677
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/stressed-asset-stabilization-fund-vs-shashi-aggarwal-cp-c0ebd43b

## Summary

### Background

The case involves a petition filed by Stressed Assets Stabilization Fund (Financial Creditor) under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 7(2) of the Insolvency & Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019. The petition seeks the initiation of the Insolvency Resolution Process against Smt. Shashi Aggarwal, the Personal Guarantor of Kumar's Metallurgical Corp. Ltd. The Corporate Debtor had availed various types of term loans from the Financial Creditor and its associate banks. To secure the repayment of the financial assistance, Smt Uma Aggarwal, Shri Anil Kumar Aggarwal, (Late) Shri Satish Kumar Aggarwal and Smt Uma Aggarwal stood

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## Facts

Stressed Assets Stabilization Fund (Financial Creditor) filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate the Insolvency Resolution Process against Smt. Shashi Aggarwal, the Personal Guarantor of Kumar's Metallurgical Corp. Ltd (Corporate Debtor). The Corporate Debtor had availed various term loans from the Financial Creditor and its associate banks, including IFCI Limited and ICICI Bank. To secure the repayment of the financial assistance, Smt Uma Aggarwal, Shri Anil Kumar Aggarwal, (Late) Shri Satish Kumar Aggarwal and Smt Uma Aggarwal stood as guarantors and executed guarantee agreements. The Financial Creditor issued a loan recall letter dated 05.09.2001 and invoked the personal guarantee on 27.09.2001,

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## Issues and analysis

### Issue 1: Whether Insolvency Resolution Process can be ordered against the Personal Guarantor Smt. Shashi …

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the

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**Reasoning:** The Tribunal noted that the Personal Guarantor had neither disposed of their liabilities

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**Interpretation:** The interpretation of Section 95 of the IBC and related rules allows for the

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**Application:** In this case, the Personal Guarantor did not dispute the debt and failed to

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## Parties

- **Judges:** N. Venkata…; Veera Brahma Rao…
- **Appellants:** Stressed Assets…
- **Respondents:** Kumar's Metallurgi…; Shashi Ag…

## Timeline

- **2001-09-05 — Loan Recall…**: Financial Creditors…
- **2001-09-27 — Personal Guarantee…**: Financial Creditors…

## 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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