# In the matter of Stressed Asset Stabilization Fund Vs. Uma Aggarwal, CP (IB)/192/2022

> NCLT judgment dated 2022-10-19. Citation: TCN-2022-NCLT-00676. The case involves a petition filed by Stressed Assets Stabilization Fund (Financial Creditor)…

- **Court:** NCLT
- **Order date:** 19 Oct 2022
- **Citation:** TCN-2022-NCLT-00676
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/stressed-asset-stabilization-fund-vs-uma-aggarwal-cp-a3bc6c45

## Summary

### Background

The case involves a petition filed by Stressed Assets Stabilization Fund (Financial Creditor) under Section 95 of the Insolvency and Bankruptcy Code, 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 Financial Creditor is seeking an order for the initiation of the Insolvency Resolution Process against Smt. Uma Aggarwal, who is 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 and others stood as guarantors and executed Guarantee Agreements.

## Facts

Stressed Assets Stabilization Fund (Financial Creditor) filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against Smt. Uma Aggarwal, the Personal Guarantor of M/S. Kumar's Metallurgical Corporation Limited (Corporate Debtor). The Corporate Debtor had availed Term Loans from the Financial Creditor and its Associate Banks. Smt Uma Aggarwal and others stood as guarantors and executed Guarantee Agreements to secure the repayment of the Financial Assistance. The Corporate Debtor defaulted on its financial obligations. The Financial Creditor issued a Loan Recall Letter and Demand Notice to the Corporate Debtor and Personal Guarantor. The Financial Creditor filed Original Applications before

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## Issues and analysis

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

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

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**Reasoning:** The Adjudicating Authority considered the submissions of the Financial Creditor, the

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**Interpretation:** The legal issue concerns the interpretation and application of Section 95 of

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** DR.VENKATA…; Veera Brahma Rao…
- **Appellants:** Stressed Assets…
- **Respondents:** M/S. Kumar's…; Uma Agg…

## Timeline

- **1991-02-05 — Guarantee Ag…**: Smt Uma Aggarwal and others…
- **1992-10-10 — Guarantee Ag…**: Smt Uma Aggarwal and others…

## 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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