Raiz Bashirudeen Vs Tata Capital Financial Services Limited (NCLAT Chennai)
The NCLAT Chennai considered an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 challenging the order admitting proceedings under Section 95 of the Code against the appellant as a Personal Guarantor to the Corporate Debtor. The appellant principally contended that the admission order was vitiated because the deed of guarantee dated 30.05.2019 had not been placed on record and the proceedings had been initiated only on the basis of a letter of guarantee.
The Corporate Debtor had obtained financial assistance from the respondent Financial Creditor in 2019 comprising a term loan and working capital facility aggregating ₹39.60 crore. The loan was sanctioned by letter dated 30.05.2019 and governed by a loan agreement executed on the same date. Following default by the Corporate Debtor, its account was declared a non-performing asset. The Financial Creditor thereafter issued a demand notice dated 19.12.2022, followed by a recall notice dated 10.01.2023 and a demand notice in Form B under Section 95(4)(b) claiming ₹18,95,48,246.53 together with interest. The Corporate Debtor was subsequently admitted into the Corporate Insolvency Resolution Process on 01.11.2023, after which proceedings under Section 95 were initiated against the appellant as Personal Guarantor.
