# In the matter of Aarti Singal & Ors. vs. State Bank of India & Anr.

> NCLAT judgment dated 2025-04-21. Citation: TCN-2025-NCLAT-00102. The appeals were filed by Personal Guarantors of the Corporate Debtor, challenging the order…

- **Court:** NCLAT
- **Order date:** 21 Apr 2025
- **Citation:** TCN-2025-NCLAT-00102
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/aarti-singal-ors-vs-state-bank-of-india-anr-e5fd5883

## Summary

### Background

The appeals were filed by Personal Guarantors of the Corporate Debtor, challenging the order that admitted a Section 95 application filed by the State Bank of India against the Personal Guarantor. The appeals also challenged the rejection of two IAs (IA No.155 of 2024 and IA No.2595 of 2024) filed by the Personal Guarantor, which sought deferment of proceedings under Section 95. The Appellants were aggrieved by the order dated 07.10.2024 passed by the Adjudicating Authority (National Company Law Tribunal) Principal Bench, New Delhi.

## Facts

Several Company Appeals (AT) (Insolvency) No. 2121, 2124, 2114 & 2115 of 2024 were filed by personal guarantors against the State Bank of India. These appeals challenged the admission of Section 95 applications under the IBC, which allows creditors to initiate insolvency proceedings against personal guarantors. The personal guarantors also filed applications seeking deferment of the Section 95 proceedings, which were rejected. The appeals stemmed from an order dated 07.10.2024 passed by the NCLT, Principal Bench, New Delhi. The corporate debtor had a resolution plan approved on 05.09.2019. The personal guarantee was invoked on 13.02.2018.

## Issues and analysis

### Issue 1: Whether the initiation of CIRP against the Personal Guarantor is erroneous given the approval of a …

**Ratio:** The financial creditor has the right to file an application under Section 95 after

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**Reasoning:** The court disagreed with the Appellant's submission that the change in the quantum of

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**Interpretation:** This clarifies that the approval of a resolution plan for the corporate debtor

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**Application:** In this case, the court found that the financial creditor (State Bank of India)

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## Parties

- **Judges:** Ashok Bh…; Arun Ba…
- **Appellants:** Aarti S…
- **Respondents:** State Bank of…
- **Advocates:** Sandeep…; Soayib Qu…; +8 more

## Timeline

- **2018-02-13 — Invocation of Personal…**: The Personal Guarantee of…
- **2019-09-05 — Approval of Resolution…**: Resolution Plan for the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95 — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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