# In the matter of K.V Jayprakash Vs. State Bank of India & Ors. Company Appeal(AT)(Ins) 362 of 2022

> NCLAT judgment dated 2022-09-30. Citation: TCN-2022-NCLAT-00175. The case involves an appeal against an order dated February 3, 2022, passed by the National…

- **Court:** NCLAT
- **Order date:** 30 Sept 2022
- **Citation:** TCN-2022-NCLAT-00175
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/kv-jayprakash-vs-state-bank-of-india-ors-company-appeal-b03066ec

## Summary

### Background

The case involves an appeal against an order dated February 3, 2022, passed by the National Company Law Tribunal (NCLT), Cuttack Bench, which dismissed an interlocutory application filed by K.V. Jayaprakash, a personal guarantor of Coastal Projects Limited (Corporate Debtor). The appellant sought to restrain the State Bank of India (Respondent No. 1) from proceeding with a public auction of his properties under Section 60(5) of the Insolvency and Bankruptcy Code (IBC), read with Rule 11 of the NCLT Rules, 2016, due to a liquidation order against the Corporate Debtor. The Corporate Debtor had availed a loan facility of Rs. 774.12 Crore from the respondent bank, with the appellant acting as guarantor and providing collateral security. After the Corporate Debtor

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## Facts

Coastal Projects Limited (Corporate Debtor) availed a loan facility of Rs. 774.12 Crore from State Bank of India (Respondent No. 1). K.V. Jayaprakash (Appellant) stood as a guarantor for the Corporate Debtor, providing his property as collateral security. The Corporate Debtor defaulted on the loan repayment, leading State Bank of India to declare the debt as a Non-Performing Asset (NPA) on January 25, 2017. Subsequently, State Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor under Section 7 of the Insolvency and Bankruptcy Code (IBC). The National Company Law Tribunal (NCLT), Kolkata Bench, admitted the petition on January 5, 2018, initiating the CIRP and appointing a resolution professional. The CIRP was unsuccessful,

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## Issues and analysis

### Issue 1: Whether Section 60(5) of IBC permits a 3rd party to file an application and redress the grievance …

**Ratio:** Section 60(5) of the IBC grants the National Company Law Tribunal (NCLT) jurisdiction to

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**Reasoning:** The court relied on the principle laid down in "Gujarat Urja Vikas Nigam Limited Vs.

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**Interpretation:** Section 60(5) of the IBC is interpreted to confer jurisdiction on the NCLT to

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**Application:** In this case, the court found that the dispute raised by the appellant was not

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## Parties

- **Judges:** Ashok Bh…; M. Satyanarayana…; +1 more
- **Appellants:** K.V. Jayap…
- **Respondents:** Coastal Projects…; State Bank of…

## Timeline

- **2017-01-25 — Debt Declared…**: State Bank of India declared the debt of Coastal Projects Limited as a Non-Performing…
- **2018-01-05 — CIRP Init…**: NCLT, Kolkata Bench, admitted State Bank of India's petition initiating Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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