# In the matter of UCO Bank vs. Sanjay Prakash Bansal

> NCLT judgment dated 2024-02-26. Citation: TCN-2024-NCLT-02392. This case involves a petition filed by UCO Bank under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 26 Feb 2024
- **Citation:** TCN-2024-NCLT-02392
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/uco-bank-vs-sanjay-prakash-bansal-67e49d07

## Summary

### Background

This case involves a petition filed by UCO Bank under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against Sanjay Prakash Bansal, the personal guarantor of M/s Bhumya Tea Company Private Limited (the Corporate Debtor). The bank seeks to initiate the Insolvency Resolution Process against the personal guarantor due to the Corporate Debtor's failure to repay credit facilities extended by the bank. The Corporate Debtor had approached the applicant seeking grant of various financial facility. On the representations made by the “Corporate Debtor ", the Applicant extended various Credit facilities on 30.08.2016, and granted Cash Credit Facility. As per the Credit Facility, “Corporate Debtor ” was obliged to repay the Principal sum of loan along with

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## Facts

UCO Bank extended credit facilities to M/s Bhumya Tea Company Private Limited, with Sanjay Prakash Bansal acting as the personal guarantor. The Corporate Debtor failed to meet its repayment obligations, leading UCO Bank to classify the account as a Non-Performing Asset (NPA) on 2018-03-31. UCO Bank issued a statutory demand notice under Section 13(2) of the SARFAESI Act, 2002, on 2019-10-31. Sanjay Prakash Bansal had executed a personal guarantee on 2016-08-30 to secure the repayment of the credit facilities. UCO Bank issued a Demand Notice in Form B on 2020-12-18, but received no response. UCO Bank then filed a petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Sanjay Prakash Bansal, the

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## Issues and analysis

### Issue 1: Whether the application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, for …

**Ratio:** The Insolvency and Bankruptcy Code, 2016, provides a framework for initiating insolvency

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**Reasoning:** The court considered the factual matrix of the case, including the Corporate Debtor's

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**Interpretation:** Section 95(1) of the IBC is interpreted to allow creditors to initiate

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**Application:** Given the Corporate Debtor's default and the existence of a personal guarantee,

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## Parties

- **Judges:** Rohit K…; Balraj…; +1 more
- **Appellants:** UCO B…
- **Respondents:** Bhumya Tea…; Sanjay Prakash…

## Timeline

- **2016-08-30 — Execution of Personal…**: Sanjay Prakash Bansal executed a personal guarantee in favor of UCO Bank to secure the…
- **2016-08-30 — Credit Facilities…**: Applicant extended various Credit facilities on 30.08.2016, and granted Cash Credit…

## 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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