ADITYA BHATNAGAR Vs. BANK OF BARODA

JUDGEMENT

(1.) The appellants have challenged the order dtd. 14/11/2025 passed by the learned single judge in W.P.No.43139/2025, whereby the petition preferred by the appellants, seeking quashment of the notice issued on 17/10/2025 by the respondent/Bank under Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtors) Rules, 2019, was dismissed.

(2.) This case is having chequered history, however, the facts suffice for disposal of the present appeal are that M/s Extol Industries availed the financial assistance from respondent/Bank of Baroda, who sanctioned a term loan to the Company on 30/4/2011, which was restructured on 26/3/2013 and thereafter on 14/1/2015. The company paid the installments and no over dues certificate was issued by the Bank on 16/1/2016 and earlier also a certificate was issued to the appellants on 30/10/2015, despite that the Bank issued the demand notice dtd. 28/4/2016 classifying the loan account as Non Performing Asset w.e.f. 31/3/2016. In the notice, the amount of future installments up to June, 2016 were also declared as outstanding amount. The company preferred W.P.No.9178/2016 before this Court, wherein by order dtd. 6/6/2016, the interim relief was granted and the petition was disposed of by order dtd. 23/8/2017 directing the respondent/Bank to consider and decide the objections raised by the Company. The Bank by order dtd. 23/11/2017 rejected the objections/representation and the said decision of Bank was also challenged by the Company in W.P.No.8446/2018, which was withdrawn with liberty to raise all the grounds in pending S.A.No.250.2018. Meanwhile, on 11/12/2017, a demand notice was issued and a sum of Rs.24,83,28,080.00 was demanded from the Company and guarantors. On receipt of the said notice, the objections were filed under Sec. 13(3-A) of the SARFAESI Act, which were rejected on 14/3/2018. Bank issued possession notice, which was assailed in S.A.No.250/2018, which was allowed by order dtd. 9/12/2024 and the DRT set aside the demand notice 11/12/2017 as well as classification of loan account as NPA w.e.f. 31/3/2016.

(3.) The Bank has preferred appeal against the order passed by the DRT, which is pending before the DRAT Allahabad. Bank has also filed the O.A.No.347/2018 before the DRT, which is also pending. The Bank moved an application under Sec. 7 of the Insolvency Bankruptcy Code, 2016 against the corporate debtor before the learned adjudicatory authority, who by order dtd. 24/3/2025 admitted the petition. The company preferred an application recalling the order, which was dismissed by the adjudicating authority of NCLT Indore. The said order was challenged by the company before the NCLAT, however, the appeal was dismissed by order dtd. 30/5/2025. The appellant no.1 was also party in the said proceedings and SLP is still pending against the said order. By the impugned demand notice dtd. 17/10/2025 issued under Rule 7 of Rules, 2019, the Bank has demanded payment of due amount from the appellants, who had extended their personal guarantee to the corporate loan.