# In the matter of Tummala Sri Ganesh vs. State Bank of India & Ors.

> NCLAT judgment dated 2024-09-30. Citation: TCN-2024-NCLAT-00171. These are a batch of five Company Appeals (315/2024, 316/2024, 319/2024, 320/2024, 321/2024)…

- **Court:** NCLAT
- **Order date:** 30 Sept 2024
- **Citation:** TCN-2024-NCLAT-00171
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/tummala-sri-ganesh-vs-state-bank-of-india-ors-544047aa

## Summary

### Background

These are a batch of five Company Appeals (315/2024, 316/2024, 319/2024, 320/2024, 321/2024) arising from a common impugned order dated 19.07.2024 passed by the NCLT, Hyderabad. The appeals are filed by personal guarantors against the rejection of their applications to recall an earlier order dated 07.02.2024, which granted liberty to the financial creditor to initiate bankruptcy proceedings against them. The NCLT had approved repayment plans on 13.09.2023, but the appellants allegedly failed to comply with the terms. The financial creditor then filed applications seeking initiation of bankruptcy proceedings, leading to the current appeals.

## Facts

The appellants are personal guarantors to Chadalvada Infratech Limited, the principal borrower. Due to defaults in financial dues, the borrower was admitted into the Corporate Insolvency Resolution Process (CIRP) on 23.09.2021. The IBBI regulations for personal guarantors came into effect on 20.11.2019. Demand notices were issued to the appellants on 21.10.2021. The financial creditor filed Company Petitions under Section 95 of the I&B Code. The NCLT granted an interim moratorium on 20.04.2022, appointed a Resolution Professional (RP), and directed the RP to submit a report. The RP issued a public notice inviting claims and asked the appellants to prepare a repayment plan. The appellants submitted repayment plans on 15.08.2022. The NCLT approved the repayment plans

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## Issues and analysis

### Issue 1: Whether the NCLT was correct in rejecting the applications filed by the Appellants seeking recall …

**Ratio:** Section 118 of the I&B Code provides that a repayment plan is deemed to have come to

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**Reasoning:** The NCLT rejected the recall applications because the appellants failed to comply with

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**Interpretation:** Section 118 establishes a clear process for dealing with the failure of a

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**Application:** The appellants failed to make payments as per the repayment plan. This

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## Parties

- **Judges:** Sharad Kumar…; Jatindranat…
- **Appellants:** TUMMALA SRI…
- **Respondents:** Chadalvada…; State Bank of…

## Timeline

- **2021-09-23 — Admission in…**: Principal borrower admitted into…
- **2019-11-20 — IBBI Regulations…**: IBBI (Insolvency Resolution Process for personal guarantors for Corporate Debtor)…

## 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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