# In the matter of The Karur Vysya Bank Ltd Vs. Sumit Goyal, CP (IB)/418/ND/2022

> NCLT judgment dated 2022-08-03. Citation: TCN-2022-NCLT-01487. The Karur Vysya Bank Limited, as the Applicant/Creditor, filed an application under Section…

- **Court:** NCLT
- **Order date:** 3 Aug 2022
- **Citation:** TCN-2022-NCLT-01487
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/the-karur-vysya-bank-ltd-vs-sumit-goyal-cp-7e79168a

## Summary

### Background

The Karur Vysya Bank Limited, as the Applicant/Creditor, filed an application under Section 95(1) r/w Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for IRP for Personal Guarantors to Corporate Debtor) Rules, 2019, to initiate the Insolvency Resolution Process against Mr. Sumit Goyal, the Personal Guarantor/Debtor. Mr. Goyal is the guarantor for M/s. Azad Impex Private Limited and M/s Giriraj Timber Private Limited, the Corporate Debtors. The guarantee deeds were executed on 2015-03-10 and 2015-06-12. The loan accounts of the Corporate Debtors became Non-Performing Assets (NPA) on 2019-02-13.

## Facts

The Karur Vysya Bank Limited filed an application to initiate the Insolvency Resolution Process against Mr. Sumit Goyal, who acted as the personal guarantor for loans extended to M/s. Azad Impex Private Limited and M/s. Giriraj Timber Private Limited. The guarantee deeds were executed on 2015-03-10 and 2015-06-12. The loan accounts of the corporate debtors were declared Non-Performing Assets (NPA) on 2019-02-13. The bank claimed outstanding debts of Rs. 65,41,34,079.89/- from M/s. Azad Impex Private Limited and Rs. 67,34,89,906.02/- from M/s. Giriraj Timber Private Limited as of 2022-04-30. The bank invoked the guarantees on 2019-02-20. Notices were sent to the personal guarantor on 2022-04-07. The application was served to the personal guarantor on 2022-06-24. The

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## Issues and analysis

### Issue 1: Whether the application filed by Karur Vysya Bank Limited under Section 95(1) r/w Rule 7(2) of the …

**Ratio:** Section 95(1) of the IBC, read with Rule 7(2) of the relevant rules, provides the legal

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**Reasoning:** The court considered the application filed by the bank, the guarantee deeds, the NPA

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**Interpretation:** Section 95(1) and Rule 7(2) are interpreted to allow creditors to pursue

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**Application:** The court applied Section 95(1) and Rule 7(2) to the facts of the case, finding

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## Parties

- **Judges:** Sh. Dharminder…; SH. L. N.…
- **Appellants:** The Karur Vysya…
- **Respondents:** M/S AZAD IMPEX…; Sumit G…

## Timeline

- **2015-03-10 — Execution of Guarantee…**: Guarantee Deeds/Agreements were executed and signed by Mr. Sumit Goyal for M/s. Azad…
- **2015-06-12 — Execution of Guarantee…**: Guarantee Deeds/Agreements were executed and signed by Mr. Sumit Goyal for M/s Giriraj…

## 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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