The NCLT Ahmedabad Division Bench dismissed an application under Section 94 of the IBC filed by a personal guarantor. The court held that no cause existed to initiate CIRP against the guarantor as the creditor had not taken steps to invoke the personal guarantee or recovered dues by selling personal assets.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD DIVISION BENCH COURT - I
ITEM No.302 CP(IB)/98(AHM)2024
Order under Section 94 IBC
IN THE MATTER OF: Manuben Bhaturbhai Dhameliya ........Applicant Vs State Bank of India & Ors. ........Respondent
Order delivered on 04/03/2024
Coram:
Mr. Shammi Khan, Hon’ble Member(J) Dr. V.G. Venkata Chalapathy, Hon,ble Member(T)
PRESENT:
For the Applicant : For the Respondent :
ORDER
The case is fixed for pronouncement of the order. The order is pronounced in the open court, vide separate sheet.
-Sd-Sd- DR. V.G. VENKATA CHALAPATHY SHAMMI KHAN MEMBER (TECHNICAL) MEMBER (JUDICIAL)
BEFORE THE ADJUDICATING AUTHORITY THE NATIONAL COMPANY LAW TRIBUNAL, SPECIAL BENCH, COURT– I, AHMEDABAD
CP/IB/98/AHM/2024
(Filed under Section 94 of the Insolvency & Bankruptcy Code, 2016 read with Rule 6 of the IB (AAA for IRP for PGCD) Rules, 2019 )
In the matter of Ms. Manuben Bhaturbhai Dhameliya
Manuben Bhaturbhai Dhameliya ,
Residing at Royal, Talaja, Distt.Bhavnagar-364150
… Applicant
VERSUS
1. State Bank of India
Having its Head office at: Stressed Assets Recovery Branch, Administrative Office Building, 2nd Floor, Nilambaug Circle, Bhavnagar, Gujarat-364001.
2. M/s Gajanand Ginning & Pressing Private Limited,
Opp. T.C.D. Farm, Palitana Road, Talaja, Distt. Bhavnagar, Gujarat-364140.
…Respondents
Order pronounced on : 04.03.2024
CORAM:
MR. SHAMMI KHAN, MEMBER (JUDICIAL) DR. V.G. VENKATA CHALAPATHY, MEMBER (TECHNICAL)
CP/IB/98/AHM/2024
Manuben Bhaturbhai Dhameliya Vs. State Bank of India & Ors.
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APPEARANCE: For the Applicant : Mr. Kuldeep Adesara, Advocate For the Respondent :
O R D E R
Manuben Bhaturbhai Dhameliya Vs. State Bank of India & Ors.
CP/IB/98/AHM/2024
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CP/IB/98/AHM/2024
Manuben Bhaturbhai Dhameliya Vs. State Bank of India & Ors.
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13, sub-section (1) and (2) of the SARFAESI Act is as follows:-
" 13. Enforcement of security interest.--(1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act.
(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub- section (4).
Provided that—
CP/IB/98/AHM/2024
Manuben Bhaturbhai Dhameliya Vs. State Bank of India
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8. The definition of 'borrower' given in SARFAESI Act under Section-2 (f) is wide enough to include a Guarantor also. Section 13 is for enforcement of security interest. The borrower within the meaning of Section 13, sub-section (2) shall obviously include the Guarantor also. .........
12 . We, thus, are satisfied that foundation which was laid down by the Appellant for initiating the CIRP against the Appellant, was not sufficient to admit Section 94 Application and initiate the CIRP against the Appellant. We may further notice that Section 10 Application against the Corporate Debtor has already been admitted and CIRP against the Corporate Debtor had been initiated. The case taken up by the Bank being categorical and clear that no steps have been taken by the Bank against the Appellant, there is no cause for the Appellant to pray for initiation of CIRP against the
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Manuben Bhaturbhai Dhameliya Vs. State Bank of India & Ors.
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Appellant – the Personal Guarantor. We, thus, do not find any good ground to interfere with the impugned order in this Appeal. The Appeal is accordingly dismissed. No costs.”
Arati-LRA
CP/IB/98/AHM/2024
Manuben Bhaturbhai Dhameliya Vs. State Bank of India & Ors.
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2 issues framed by the court
Whether an application under Section 94 of the IBC can be admitted when no step has been taken to invoke the personal guarantee of the applicant by the secured creditor.
Whether the declaration of accounts as NPA under SARFAESI is sufficient to initiate CIRP against a personal guarantor.
Colour shows how this judgement treated each authority
Amanjyot Singh vs. Navneet Kumar Jain & Ors.Relied on¶42
Amanjyot Singh Vs. Navneet Kumar Jain & Ors. (Company Appeal (AT) (Insolvency) No. 961 of 2022)
2 provisions across 2 enactments
Manuben Bhaturbhai Dhameliya
State Bank of India
M/s Gajanand Ginning & Pressing Private Limited
Shammi Khan
V.G. Venkata Chalapathy
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
