An application under Section 95 of the IBC against a personal guarantor is maintainable only if the guarantee has been properly invoked and the claim is filed within three years from the date of default, as per Article 137 of the Limitation Act.

Case of the Applicant/FC:

1. The present Company Application is filed by Union Bank of India¹Hereinafter referred to as Financial Creditor/FC/Applicant. under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 read with Rule 7 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 against Mrs. P. Lakshmi Sruthi²Referred to as Personal Guarantor/PG, personal guarantor to the Corporate Debtor³Referred to as CD namely Minerva Executive Apartments Private Limited.

2. It is submitted that, the CD had availed various credit facilities from the FC pursuant to sanction letter dated 23.02.2009. In furtherance thereof, the CD executed a General Term Loan Agreement, Demand Promissory Note and other allied loan and security documents on 28.04.2009 in favour of the FC.

3. It is further contended that, the credit facilities were renewed and enhanced vide sanction letters dated 26.08.2010 and 28.09.2012. Pursuant to such renewals, the CD and the Personal Guarantor executed various loan and security documents including Demand Promissory Notes dated 27.10.2010, 18.01.2011 and 28.09.2012, General Term Loan Agreements, Term Loan Agreements for hypothecation of movable assets, Board Resolution dated 28.09.2012 and Letters of Guarantee dated 27.10.2010, 18.01.2011, 28.09.2012, 17.09.2013 and 28.09.2014 in favour of the FC for securing the credit facilities availed by the CD.

4. Subsequently, upon persistent defaults and failure to maintain financial discipline, the debt was recalled and became due on 31.07.2013. Thereafter, the loan account of the CD was classified as a Non-Performing Asset⁴Referred to as NPA on 31.10.2013. Consequently, the FC issued a demand notice dated 23.12.2013 under Section 13(2) of the SARFAESI Act, 2002 to the CD and its Personal Guarantors.

5. Thereafter, the FC initiated recovery proceedings before the Ld. Debts Recovery Tribunal, under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 by filing OA No. 729 of 2018 seeking recovery of the outstanding dues along with interest, which proceedings are presently pending adjudication.

6. In the meanwhile, proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 came to be initiated against the CD and the same were admitted by this Tribunal vide order dated 05.03.2019 in CP(IB) No. 542/7/HDB/2018.

7. Thereafter, the FC issued demand notice in Form-B under Rule 7 (1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 calling upon the Personal Guarantor to discharge the outstanding debt.

8. As on 31.12.2022, a sum of Rs.196,42,14,780.54/- (Rupees One Hundred Ninety-Six Crores Forty-Two Lakhs Fourteen Thousand Seven Hundred Eighty and Paise Fifty-Four only), together with further interest, costs and charges thereon till realization, remained due and payable by the CD and the Personal Guarantor to the FC.

9. It is respectfully submitted that the liquidation proceedings of the CD were closed vide order dated 24.11.2023 passed by this Tribunal in IA No.549/2021 in CP(IB) No.524/7/HDB/2018 consequent upon sale of the CD as a going concern.

10. Despite repeated demands and issuance of statutory notices, the outstanding dues have not been discharged. Hence, the pres