# The COSMOS Co-Op. Bank Ltd. vs. Rajendra Singhal

> NCLT judgment dated 2026-09-09. Citation: TCN-2026-NCLT-01153. The Cosmos Co-Operative Bank Ltd. (Financial Creditor) filed an application under Section 95 of…

- **Court:** NCLT
- **Order date:** 9 Sept 2026
- **Citation:** TCN-2026-NCLT-01153
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-indore/the-cosmos-co-operative-bank-ltd-vs-rajendra-singhal-yq8yu

## Summary

### Background

The Cosmos Co-Operative Bank Ltd. (Financial Creditor) filed an application under Section 95 of the IBC, 2016, against Mr. Rajendra Singhal, a personal guarantor for M/s Labhanshi Multitrade Private Limited (Corporate Debtor). The Corporate Debtor had availed significant credit facilities, for which Mr. Singhal executed Deeds of Guarantee. The Corporate Debtor's account became a Non-Performing Asset (NPA) on 12.09.2024, and a default qua the guarantor occurred on 25.12.2024 after a SARFAESI notice invoking the guarantee and a Form B demand notice were issued. The total debt in default was Rs. 22,88,37,876.29/-. The Resolution Professional, MVK IPE LLP, appointed by the Tribunal, recommended the admission of the application. The Respondent objected, primarily arguing

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## Facts

The COSMOS Co-Operative Bank Ltd. (Applicant/Financial Creditor) filed an application under Section 95 of the IBC, 2016, against Mr. Rajendra Singhal (Respondent/Personal Guarantor).

Mr. Rajendra Singhal is the personal guarantor of M/s Labhanshi Multitrade Private Limited (Corporate Debtor).

The Corporate Debtor availed a cash credit facility of Rs. 2,150.00 lakh and five term loans aggregating Rs. 530.00 lakh from the Financial Creditor.

The Respondent, along with other guarantors, executed Deeds of Guarantee on 25.10.2019, 21.01.2021, and 16.12.2022, undertaking joint and several liability for the repayment of facilities.

The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) on 12.09.2024.

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## Issues and analysis

### Issue 1: Whether the guarantee furnished by the Respondent stood validly invoked by the notice under Section …

**Ratio:** A notice issued under Section 13(2) of the SARFAESI Act, which makes a clear demand for

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**Reasoning:** The NCLAT, in Asha Basantilal Surana v. State Bank of India, clarified that no particular

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**Interpretation:** The court interprets "invocation of guarantee" broadly to include a

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**Application:** The SARFAESI notice dated 25.10.2024, addressed to the Respondent as guarantor,

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## Parties

- **Judges:** Brajendra Mani…; Man Mohan…
- **Appellants:** The Cosmos…
- **Respondents:** M/s Labhanshi…; RAJENDRA S…
- **Other parties:** MVK IPE…; Mangesh Vitthal…
- **Advocates:** Ayushi Patidar,…; Rohit D…

## Timeline

- **2019-10-24 — Credit Facilities Sanctioned & Guarantee…**: The Corporate Debtor was sanctioned cash credit and term loans, and the Respondent…
- **2020-12-16 — Additional Term Loans &…**: The Corporate Debtor was sanctioned additional term loans, and the Respondent executed…

## 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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