State Bank of India Vs Naseer Ahmed (NCLT Bengaluru)
The National Company Law Tribunal (NCLT), Bengaluru Bench, allowed an application filed by Canara Bank, State Bank of India, and IDBI Bank under Section 121(b) of the Insolvency and Bankruptcy Code, 2016, to initiate bankruptcy proceedings against the personal guarantor of M/s. Scotts Garments Limited for an outstanding amount of ₹1,454.71 crore. The corporate debtor’s loan accounts had been classified as non-performing assets in 2018 by the consortium lenders. The respondent had executed personal guarantee documents for the credit facilities extended to the corporate debtor.
Earlier, insolvency proceedings against the personal guarantor had been admitted by the Tribunal on 7 June 2022, and a Resolution Professional (RP) was appointed. The RP invited claims from creditors and admitted claims of State Bank of India, IDBI Bank, and Canara Bank aggregating to ₹764.90 crore. Despite being given opportunities, the personal guarantor did not submit a repayment plan. The creditors treated the absence of a repayment plan as a deemed repayment plan of nil value and resolved to seek initiation of bankruptcy proceedings. The Tribunal subsequently permitted the creditors to initiate bankruptcy proceedings under the Code, following which Canara Bank filed the present application on behalf of the consortium lenders.
