# In the matter of Union Bank of India Vs. E M Najeeb Ellias Mohammed, CP (IBC)/55/KOB/2022

> NCLT judgment dated 2023-01-25. Citation: TCN-2023-NCLT-04907. The case involves an application filed by Union Bank of India under Section 95 of the…

- **Court:** NCLT
- **Order date:** 25 Jan 2023
- **Citation:** TCN-2023-NCLT-04907
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/union-bank-of-india-vs-e-m-najeeb-ellias-mohammed-cp-aa7e090c

## Summary

### Background

The case involves an application filed by Union Bank of India under Section 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy Rules, 2019, against E.M. Najeeb Ellias Mohammed, the personal guarantor of Green Gateway Leisure Ltd. The corporate debtor had availed a term loan of Rs. 25 crores from the financial creditor for setting up a Five Star Deluxe Resort at Bekal. The loan was renewed/restructured/modified multiple times. The corporate debtor defaulted on repayments, leading to the account being classified as NPA. An earlier Section 7 application filed by the financial creditor was initially admitted but later set aside by the NCLAT, which directed the corporate debtor to settle the account. However, the debt

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## Facts

Green Gateway Leisure Ltd. (Corporate Debtor) obtained a term loan of Rs. 25 crores from Union Bank of India (Financial Creditor) to establish a Five Star Deluxe Resort at Bekal. E.M. Najeeb Ellias Mohammed (Personal Guarantor) provided a personal guarantee for the loan. The loan was renewed/restructured/modified on several occasions. The Corporate Debtor defaulted on repayments, leading to the account being classified as NPA on 2015-09-30. The Financial Creditor initially filed an application under Section 7 of the IBC, which was admitted but later set aside by the NCLAT, directing the Corporate Debtor to settle the account within 6 months. The debt remained unpaid, amounting to Rs. 40,25,34,886/- as on 2022-08-31. The Financial Creditor issued a demand notice to the

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## Issues and analysis

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

**Ratio:** Section 95(1) of the IBC postulates that a creditor may, either by himself or through a

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**Reasoning:** The court noted that the application was filed through an Insolvency Resolution

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**Interpretation:** Section 95 of the IBC allows a financial creditor to initiate insolvency

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**Application:** In this case, the Financial Creditor filed the application through a Resolution

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## Parties

- **Judges:** P. Moha…; Satya Ranjan…
- **Appellants:** Union Bank of…
- **Respondents:** Green Gateway…; E.M. NAJEEB…

## Timeline

- **2010-06-12 — Sanction of T…**: Financial Creditor granted a General Term Loan…
- **2012-09-29 — Loan Restru…**: The term loan was…

## Legal provisions

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

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