# In the matter of Amit Dineshchandra Patel & Ors. vs. State Bank of India

> NCLAT judgment dated 2025-01-03. Citation: TCN-2025-NCLAT-00412. The case involves two appeals (Company Appeal No. 1826 and 1827 of 2024) filed by Shri Amit…

- **Court:** NCLAT
- **Order date:** 3 Jan 2025
- **Citation:** TCN-2025-NCLAT-00412
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/amit-dineshchandra-patel-ors-vs-state-bank-of-india-a59cce44

## Summary

### Background

The case involves two appeals (Company Appeal No. 1826 and 1827 of 2024) filed by Shri Amit Dineshchandra Patel and Shri Rahul Arunprasad Patel respectively, against the impugned order dated 17.05.2024 passed by the Adjudicating Authority, National Company Law Tribunal, Ahmedabad Bench in CP (IB) No. 76 (AHM) and 77 (AHM) of 2021. The appeals challenge the admission of Section 95(1) applications filed by State Bank of India for initiating insolvency resolution process against the Appellants as Personal Guarantors.

## Facts

On 09.02.2016, State Bank of India (SBI), Bank of Baroda, and IDBI Bank entered into a Common Loan Agreement (CORLA) with Shirpur Power Private Limited for financing under a COR Facility Agreement.

A Security Trustee Agreement dated 21.09.2015 appointed SBI Cap as the Security Trustee for holding and dealing with the security, including the guarantee.

A Personal Guarantee Agreement (PGA) was signed by the Appellants (Amit Dineshchandra Patel and Rahul Arunprasad Patel) with SBI Cap as Security Trustee on 09.02.2016.

The account of Shirpur Power Private Limited was declared as NPA on 29.11.2017 by SBI.

On 10.05.2018, SBI recalled the loan amounts advanced under the CORLA.

On 02.06.2018, SBI invoked the personal guarantee of the Appellants and issued a demand certificate.

…

## Issues and analysis

### Issue 1: Whether the Respondent No.1 Bank was entitled to invoke the personal guarantee in the facts of the …

**Ratio:** The personal guarantee was given under the CORLA expressly for the benefit of COR

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**Reasoning:** The CORLA and PGA were signed on the same date and their terms are integral and

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**Interpretation:** The clauses of the CORLA clearly make a distinction between “COR Lenders” and

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**Application:** The Appellant as personal guarantor was mandatorily obliged to honour its

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** Amit Dineshchandra…; Rahul Arunprasad…
- **Respondents:** Shirpur Power…; State Bank of…; +1 more
- **Other parties:** Bank of B…; IDBI…
- **Advocates:** Arjun S…; Kriti Ko…; +5 more

## Timeline

- **2016-02-09 — CORLA Agr…**: SBI, Bank of Baroda, and IDBI Bank entered into a Common Loan Agreement (CORLA) with…
- **2015-09-21 — Security Trustee…**: SBI Cap was appointed as…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95(1) — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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