# In the matter of UCO Bank Vs. Kapil Mehra, CP (IB)/20(KB)/2022

> NCLT judgment dated 2022-07-11. Citation: TCN-2022-NCLT-01771. This case involves an application filed by UCO Bank under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 11 Jul 2022
- **Citation:** TCN-2022-NCLT-01771
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/uco-bank-vs-kapil-mehra-cp-a09f6e41

## Summary

### Background

This case involves an application filed by UCO Bank under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the relevant rules and regulations, to initiate the Insolvency Resolution Process against Sri Kapil Mehra, the personal guarantor for M/s. Atlantic Projects Limited (APL). APL had approached UCO Bank for financial assistance, and a Deed of Guarantee was executed by Sri Kapil Mehra. APL defaulted on its payments, leading to its account being classified as NPA. Subsequently, APL was admitted into CIRP, and a resolution plan was approved. UCO Bank also filed an application before the Debts Recovery Tribunal-I, Kolkata. The present application seeks to initiate insolvency proceedings against the personal guarantor.

## Facts

UCO Bank extended credit facilities to M/s. Atlantic Projects Limited (APL), with Sri Kapil Mehra acting as a personal guarantor. A Deed of Guarantee was executed on 2016-03-30. APL defaulted on its repayment obligations, leading to its account being classified as a Non-Performing Asset (NPA). Subsequently, APL was admitted into Corporate Insolvency Resolution Process (CIRP) by the NCLT, Kolkata Bench, and a resolution plan was approved. UCO Bank received Rs. 57.02 Lakhs under the resolution plan. UCO Bank also filed an application before the Debts Recovery Tribunal-I, Kolkata. UCO Bank issued a Demand Notice in Form B on 2021-04-17 demanding Rs. 38,57,72,561.89. Sri Kapil Mehra replied to the demand notice on 2021-07-28. The bank replied to the guarantor's letter on

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## Issues and analysis

### Issue 1: Whether the application for initiating the Insolvency Resolution Process against the personal …

**Ratio:** The Insolvency and Bankruptcy Code, 2016 allows for the initiation of insolvency

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**Reasoning:** The court acknowledges the arguments made by the respondent-personal guarantor regarding

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**Interpretation:** The interpretation of the IBC provisions regarding personal guarantors is that

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**Application:** In this case, the court will determine whether the approved resolution plan for

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## Parties

- **Judges:** RohitKa…; Harish Chander…
- **Appellants:** UCO B…
- **Respondents:** M/s. Atlantic…; Kapil M…
- **Advocates:** Rituparna…; Milan Sing…; +3 more

## Timeline

- **2016-03-30 — Deed of Guarantee…**: Sri Kapil Mehra executed a deed of guarantee jointly with Sri Siddharth Mehra and Sri…
- **2019-10-15 — CIRP Admissio…**: M/s. Atlantic Projects Limited (APL) was admitted into Corporate Insolvency Resolution…

## 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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