# In the matter of Bank of Maharashtra vs. Rayapudi Rama Devi

> NCLT judgment dated 2023-07-07. Citation: TCN-2023-NCLT-05351. The Financial Creditor, Bank of Maharashtra, filed a petition under Section 95 of the…

- **Court:** NCLT
- **Order date:** 7 Jul 2023
- **Citation:** TCN-2023-NCLT-05351
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-hyderabad/bank-of-maharashtra-vs-rayapudi-rama-devi-69d6b401

## Summary

### Background

The Financial Creditor, Bank of Maharashtra, filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019, seeking initiation of the Insolvency Resolution Process against Smt. Rayapudi Rama Devi, the Personal Guarantor of M/s. Bakeys Foods Private Limited.

## Facts

The Petitioner Bank sanctioned a working capital facility consisting of a Cash Credit facility with a limit of Rs.2.00 Crores to M/s. Bakeys Foods Private Limited.

The total repayments of the corporate debtor amounted to Rs.7,36,91,231.73/-, including a principal amount of Rs. 1,96,21,170.00/- and interest of Rs. 5,40,70,061.73/- calculated until 23.08.2022.

The loan account of Respondent No.2 (Bakeys Foods Private Limited) was declared as NPA on 28.01.2014.

Respondent No.1, Smt. Rayapudi Rama Devi, executed a Deed of Guarantee on 16.02.2013 to secure the financial assistance granted by the financial creditor to Respondent No.2.

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## Issues and analysis

### Issue 1: Whether an Insolvency Resolution Process can be ordered against the Personal Guarantor under …

**Ratio:** Yes, based on the facts presented and the report of the RP, the Tribunal considered it a

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**Reasoning:** The Personal Guarantor did not contest the matter despite being served notice and the

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**Interpretation:** Section 100 of the IBC allows for the initiation of the Insolvency Resolution

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**Application:** The Tribunal applied the provisions of Section 100 of the IBC to the facts of

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Bank of Maharashtr…
- **Respondents:** Bakeys Foods…; Rayapudi Ra…
- **Other parties:** Murali Mohan…
- **Advocates:** Varun A…; Aishwarya…

## Timeline

- **15.02.2013 — Sanction…**: Petitioner Bank issued Sanction…
- **16.02.2013 — Deed of Gua…**: Personal Guarantor…

## 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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