# In the matter of Canbank Factors Limited vs. D. Rama Linga Raju

> NCLT judgment dated 2025-10-16. Citation: TCN-2025-NCLT-01605. Canbank Factors Limited, a financial creditor, filed a petition under Section 95 of the…

- **Court:** NCLT
- **Order date:** 16 Oct 2025
- **Citation:** TCN-2025-NCLT-01605
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-hyderabad/canbank-factors-limited-vs-d-rama-linga-raju-4cb589b2

## Summary

### Background

Canbank Factors Limited, a financial creditor, filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Personal Insolvency Resolution Process (PIRP) against Sri D. Rama Linga Raju, the personal guarantor of M/s. Vensa Laboratories Pvt Ltd, the corporate debtor.

## Facts

The Corporate Debtor, Vensa Laboratories Pvt. Ltd., availed financial facilities from Canbank Factors Limited.

Sri D. Rama Linga Raju executed guarantee agreements to secure the repayment of the financial assistance provided to the Corporate Debtor.

The Corporate Debtor defaulted on repayment, leading to the issuance of a Loan Recall Notice.

Canbank Factors Limited issued a Demand Notice dated 24.01.2024 under Rule 7(1) of the Insolvency and Bankruptcy Rules, 2019.

The Resolution Professional recommended the admission of the application based on the details recorded in the RP report.

The Personal Guarantor filed a counter denying the averments made by the Financial Creditor.

The Financial Creditor relied on the publication of the demand notice in newspapers.

…

## Issues and analysis

### Issue 1: Whether the demand notice issued in Form B under Rule 7(1) can be treated as an invocation of the …

**Ratio:** A demand notice in Form B merely serves as a demand for payment of the defaulted amount

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**Reasoning:** The Adjudicating Authority observed that no invocation of the guarantee had been made

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**Interpretation:** The invocation of a personal guarantee must be in accordance with the terms of

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**Application:** The Adjudicating Authority held that the demand notice in Form B cannot be

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## Parties

- **Judges:** Rajeev Bh…; Yogendra Kumar…
- **Appellants:** Canbank Factors…
- **Respondents:** Vensa Laboratories…; D Rama Ling…
- **Other parties:** Rajesh Ch…

## Timeline

- **2006-02-03 — Guarantee Agr…**: Sri D. Rama Linga Raju executed guarantee agreements to secure the repayment of the…
- **2012-08-17 — Default in Re…**: The Corporate Debtor…

## 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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