# In the matter of Union Bank of India vs. Dr Sahadulla M.I

> NCLT judgment dated 2024-02-29. Citation: TCN-2024-NCLT-02321. The Union Bank of India filed an application under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 29 Feb 2024
- **Citation:** TCN-2024-NCLT-02321
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/union-bank-of-india-vs-dr-sahadulla-mi-11f9082b

## Summary

### Background

The Union Bank of India filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the IBBI (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, seeking initiation of the insolvency resolution process against Mr. Sahadulla M.I., the personal guarantor to M/s. Green Gateway Leisure Limited, the corporate debtor. Green Gateway Leisure Limited had availed various credit facilities from the Union Bank of India, which sanctioned a term loan of Rs. 25 Crores on 12.06.2010. The security for the loan included a first charge on the corporate debtor's fixed assets, a corporate guarantee from Air Travel Enterprises India Limited, and personal guarantees

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## Facts

M/s. Green Gateway Leisure Limited availed credit facilities from Union Bank of India, which sanctioned a term loan of Rs. 25 Crores on 12.06.2010. The security included a first charge on the corporate debtor's fixed assets, a corporate guarantee from Air Travel Enterprises India Limited, and personal guarantees from Mr. E.M. Najeeb, Mr. Sahadulla M.I., Mr. E. Iqbal, and Mr. Zaheer E.N. Mr. Sahadulla M.I. was a director of the Corporate Debtor. The Corporate Debtor executed Demand Promissory Notes on 12.06.2010, 29.09.2012, 24.02.2014, 12.01.2015, and 01.07.2016. The Corporate Debtor defaulted on repayment and was declared a non-performing asset on 30.09.2015. A demand notice was issued on 29.12.2017, demanding Rs. 26,85,08,554/-. A one-time settlement scheme was

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## Issues and analysis

### Issue 1: Whether the application filed under Section 95 of the IBC is maintainable against the personal …

**Ratio:** Section 95 of the IBC allows a creditor to initiate insolvency resolution process against

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**Reasoning:** The Tribunal noted that the application was filed under Section 95 of the IBC, which

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**Interpretation:** Section 95 of the IBC provides a mechanism for creditors to recover their dues

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**Application:** The Tribunal applied Section 95 of the IBC to the facts of the case, finding

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## Parties

- **Judges:** Shri. Shyam Babu…; TMT. Justice…
- **Appellants:** Union Bank of…
- **Respondents:** M/s Green Gateway…; Mr Sahadul…
- **Advocates:** C P Ani…; Sankar. P.…

## Timeline

- **2010-06-12 — Term Loan San…**: Union Bank of India sanctioned a term loan of Rs. 25 Crores to M/s. Green Gateway Leisure…
- **2015-09-30 — Account Decla…**: The Corporate Debtor's account was…

## 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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