# In the matter of Union Bank of India vs. KMR Enterprises

> NCLT judgment dated 2024-09-11. Citation: TCN-2024-NCLT-00619. Union Bank of India filed a petition against M/s KMR Enterprises, the personal guarantor to the…

- **Court:** NCLT
- **Order date:** 11 Sept 2024
- **Citation:** TCN-2024-NCLT-00619
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/union-bank-of-india-vs-kmr-enterprises-7a78084b

## Summary

### Background

Union Bank of India filed a petition against M/s KMR Enterprises, the personal guarantor to the corporate debtor M/s. Smaat India Private Limited, under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process. The corporate debtor had availed credit facilities from the creditor, and the respondent provided a personal guarantee. The corporate debtor defaulted on repayments, leading to the classification of accounts as non-performing assets. The creditor served a demand notice under Section 13(2) of the SARFAESI Act. The corporate debtor was previously admitted into Corporate Insolvency Resolution Process, which later resulted in liquidation and subsequent acquisition by a new entity. The creditor then sent a demand

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## Facts

Union Bank of India (the creditor) filed a petition against M/s KMR Enterprises (the personal guarantor) for the debts of M/s. Smaat India Private Limited (the corporate debtor). The corporate debtor availed OCC and Term Loans from the creditor, with the latest renewal on 03.12.2006. The respondent provided a personal guarantee by executing a Deed of Guarantee dated 27.12.2016. The corporate debtor defaulted on repayments on 30.04.2016, leading to NPA classification. A demand notice was served on 30.07.2016 under Section 13(2) of SARFAESI Act. The corporate debtor underwent CIRP, liquidation, and was eventually bought as a going concern. A demand notice was sent on 07.08.2023 under Section 95(4)(b) of the IBC. The creditor submitted documents including statements of

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## Issues and analysis

### Issue 1: Whether a petition under section 95 of the IBC, 2016 against a partnership firm is maintainable …

**Ratio:** Section 5(22) of the IBC, 2016 defines a personal guarantor as an individual, not a

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**Reasoning:** The court reasoned that the IBC provisions, particularly Section 5(22) and Section 79(1),

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**Interpretation:** The court interpreted Section 5(22) of the IBC to mean that a personal

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**Application:** Since M/s KMR Enterprises is a partnership firm, it does not fall under the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Union Bank of…
- **Respondents:** M/s. Smaat India…; M/s. K M R…

## Timeline

- **2006-12-03 — Renewal of Credit…**: Latest renewal of the credit…
- **2016-03-16 — Sanction Letter…**: Sanction letter issued by creditor to corporate debtor acknowledged by the personal…

## 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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