# In the matter of Tata Capital Financial Services Limited vs. Akshay Sunil Shah

> NCLT judgment dated 2024-02-28. Citation: TCN-2024-NCLT-02329. The case pertains to an application filed under Section 95(1) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 28 Feb 2024
- **Citation:** TCN-2024-NCLT-02329
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/tata-capital-financial-services-limited-vs-akshay-sunil-shah-c29585db

## Summary

### Background

The case pertains to an application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy Rules, 2019, by Tata Capital Financial Services Limited (the Financial Creditor) to initiate the Insolvency Resolution Process against Akshay Sunil Shah (the Personal Guarantor) of Neel Motors LLP (the Corporate Debtor). The Financial Creditor had sanctioned a Channel Finance Facility to the Corporate Debtor, which was guaranteed by the Personal Guarantor. Upon failure to repay the loan, the Financial Creditor initiated proceedings against the Personal Guarantor.

## Facts

Tata Capital Financial Services Limited (the Financial Creditor) filed a petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Akshay Sunil Shah (the Personal Guarantor) of Neel Motors LLP (the Corporate Debtor). The Financial Creditor had sanctioned a Channel Finance Facility of Rs. 1,50,00,000/- to the Corporate Debtor on 29.12.2016, which was guaranteed by the Personal Guarantor through an irrevocable and unconditional personal guarantee also dated 29.12.2016. The loan carried a floating interest of 11.25% p.a. The finance facility was renewed from time to time. Upon failure to repay the loan, the Financial Creditor issued a Loan Recall Notice dated 26.02.2021, demanding payment of Rs.

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## Issues and analysis

### Issue 1: Whether the application for initiating the insolvency resolution process against the Personal …

**Ratio:** Section 95(1) of the Insolvency and Bankruptcy Code, 2016 allows a creditor to initiate

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**Reasoning:** The court observed that the petition for initiating the insolvency resolution process

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**Interpretation:** Section 95(1) provides a mechanism for creditors to recover their dues from

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**Application:** The court applied Section 95(1) to the facts of the case, noting that the

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## Parties

- **Judges:** Charanjeet Singh…; Smt Lakshmi…
- **Appellants:** Tata Capital…
- **Respondents:** Neel Moto…; Akshay Suni…

## Timeline

- **2016-12-29 — Sanction of Channel…**: Tata Capital Financial Services Limited sanctioned a Channel Finance Facility of Rs.…
- **2021-02-26 — Loan Recall…**: Tata Capital Financial Services Limited issued a Loan Recall Notice to Neel Motors LLP…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95(1) — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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