An interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016, upon a valid application against a personal guarantor, operates to stay all pending legal actions and prohibits the initiation of new proceedings by any creditor against the debtor for any debt.

IN THE NATIONAL COMPANY LAW TRIBUNAL

HYDERABAD BENCH - II

CP(IB)/40/95/HDB/2025

IN THE MATTER OF

M/s Aditya Raiment Private Limited

Between:

Bank of Maharashtra

Lokmangal, 1501, Shivajinagar, Pune-411005

Represented by Managing Director

...PETITIONER/FINANCIAL CREDITOR

AND

M. Surya Prabhakar,

R/o C-11, Vikrampuri Colony,

Karkhana, Secunderabad

... RESPONDENT/PERSONAL GUARANTOR

CORAM:

Sri Rajeev Bhardwaj, Hon’ble Member (Judicial)

Sri Sanjay Puri, Hon’ble Member (Technical)

Counsels’ presence:

For the Petitioner : Ms. Ayushi Patidar, Advocate

For the Respondent : Mr. Rajeshwaran, Advocate

For the Resolution Professional : Ms. Aashi Gupta, Advocate

I. Case Of the Petitioner:

1. The present Application has been filed by Bank of Maharashtra¹Referred to as Petitioner Bank/Financial Creditor, on 28.01.2025, through a Resolution Professional under Section 95 of the Insolvency and Bankruptcy Code, 2016²Referred to as IBC, seeking initiation of the Insolvency Resolution Process against Mr. M. Surya Prabhakar³Referred to as Respondent /Personal Guarantor/PG, who has furnished personal guarantees in respect of the credit facilities extended to the Corporate Debtor.

2. The Corporate Debtor, M/s Aditya Raiment Private Limited bearing Corporate Identification Number - U52100TG2011PTC075058, was incorporated on 17.06.2011.

3. The Corporate Debtor approached the Petitioner Bank for the grant of various credit facilities to support its working capital requirements. Pursuant to such approach, the Petitioner Bank sanctioned credit facilities in favour of the Corporate Debtor.

4. Initially, a Cash Credit Facility of Rs.450 Lakhs was sanctioned vide Sanction Letter dated 28.09.2011, which was subsequently enhanced to Rs.1,600 Lakhs vide Sanction Letter dated 18.06.2012. In addition thereto, the Petitioner Bank also sanctioned a Bank Guarantee Facility of Rs. 25 Lakhs and a Term Loan Facility of Rs. 300 Lakhs.

5. In order to secure the financial assistance extended to the Corporate Debtor, the Respondent herein, along with other guarantors, executed Personal Guarantee Agreements dated 09.01.2012 and 22.06.2012 in favour of the Petitioner Bank, thereby guaranteeing due repayment of the amounts outstanding under the credit facilities granted to the Corporate Debtor.

6. Thereafter, the Corporate Debtor committed defaults in repayment of the outstanding dues under the loan facilities availed thereto. In view of the continued irregularities and failure to regularize the loan accounts, the account of the Corporate Debtor was classified as a Non-Performing Asset⁴Referred to as "NPA” in accordance with the applicable guidelines and norms governing banking operations.

7. Consequent upon such default, the Petitioner Bank initiated recovery proceedings and issued a Demand Notice dated 21.11.2014 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002⁵Referred to as "SARFAESI Act", calling upon the borrowers and guarantors to discharge the outstanding liabilities.

8. Subsequently, a Loan Recall Notice dated 19.01.2015 was issued by the Petitioner Bank, whereby the entire outstanding dues under the credit facilities were recalled, and the Corporate Debtor along with the guarantors of the CD, were called upon to make payment of the amounts due and payable to the petitioner bank.

9. Despite the aforesaid repeated demands made by the Petitioner Bank, the outstanding debt remained unpaid. Consequently, in compliance with Rule 7(1) of the Insolvency and B