# In the matter of Canara Bank vs. Valsala T S & Ors.

> NCLT judgment dated 2025-07-09. Citation: TCN-2025-NCLT-00813. Canara Bank, as the Financial Creditor, filed Company Petitions under Section 95 of the…

- **Court:** NCLT
- **Order date:** 9 Jul 2025
- **Citation:** TCN-2025-NCLT-00813
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-kochi/canara-bank-vs-valsala-t-s-ors-0b583a6d

## Summary

### Background

Canara Bank, as the Financial Creditor, filed Company Petitions under Section 95 of the Insolvency & Bankruptcy Code, 2016, read with Rule 7(2) of the relevant rules, to initiate insolvency resolution processes against Smt. Valsala T S, Mr. Stephen Logan, and Mr. P A Nazeeb, who are personal guarantors to M/s Savute Textiles Private Limited, the Corporate Debtor, for a default amounting to Rs. 43,68,79,602/- plus further interest.

## Facts

Canara Bank filed petitions against Valsala T S, Stephen Logan, and P A Nazeeb, personal guarantors to M/s Savute Textiles Private Limited.

The Corporate Debtor, M/s Savute Textiles Private Limited, availed credit facilities from Canara Bank.

The Corporate Debtor defaulted on repayment, leading to its account being classified as NPA on 14.06.2019.

The Financial Creditor filed an Original Application before DRT-1, Ernakulam, for recovery.

A petition under Section 9 of IBC was filed by M/s. Sulpa International against the Corporate Debtor, which was admitted on 11.03.2022, initiating CIRP.

The Corporate Debtor was put into liquidation by the Tribunal on 06.07.2023.

The Financial Creditor filed notices of invocation of guarantee dated 29.01.2024 against the guarantors.

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## Issues and analysis

### Issue 1: Whether the demand notices issued by the Financial Creditor were valid and in compliance with the …

**Ratio:** The demand notices were found to be invalid as they claimed the entire outstanding amount

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**Reasoning:** The Tribunal observed that the bank should have specified the extent of each guarantor's

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**Interpretation:** The terms of the guarantee agreement govern the extent of the guarantor's

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**Application:** The Tribunal applied this principle to the facts of the case, finding that the

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## Parties

- **Judges:** Madhu S…; Vinay…
- **Appellants:** Canara…
- **Respondents:** M/s. Savute…; Valsala…; +2 more
- **Other parties:** Balakrishnan…
- **Advocates:** Akhil S…; Ammu Ch…; +1 more

## Timeline

- **14.06.2019 — Date of D…**: The Corporate Debtor's…
- **11.03.2022 — CIRP Init…**: Corporate Insolvency Resolution Process 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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