Dr. Badri Prasad Vs Tata Capital Financial Services Limited (NCLAT Chennai)
The appeal arose from an order dated 14.08.2024 admitting an application under Section 95 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the appellant in his capacity as a personal guarantor. The appellant claimed that he had earlier ceased to participate in the management of the corporate debtor pursuant to a Memorandum of Understanding (MoU) dated 01.03.2014 and subsequent withdrawal of his authority to operate the company’s bank accounts. He contended that he therefore could not be held liable for the loan subsequently sanctioned to the corporate debtor.
The record showed that the corporate debtor obtained a term loan and working capital facility aggregating Rs.39.60 crore under a sanction letter dated 13.05.2019. The appellant admitted that his name appeared in the sanction letter and that he had signed it as a guarantor. The sanction letter described him as one of the personal guarantors and referred to an irrevocable and unconditional personal guarantee. A loan agreement, deed of guarantee, deed of hypothecation and other security documents were also executed on the same date, and the loan agreement contained provisions obligating the guarantors to discharge the liabilities in the event of default. The appellant also admitted signing the letter of guarantee.
