# In the matter of Y.Y. Butchi Babu vs. State Bank of India

> NCLAT judgment dated 2026-01-07. Citation: TCN-2026-NCLAT-00002. These appeals challenge the initiation of insolvency proceedings against personal guarantors…

- **Court:** NCLAT
- **Order date:** 7 Jan 2026
- **Citation:** TCN-2026-NCLAT-00002
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/yy-butchi-babu-vs-state-bank-of-india-d1b2c4ca

## Summary

### Background

These appeals challenge the initiation of insolvency proceedings against personal guarantors of a corporate debtor, arguing that the debt was already extinguished due to repayments.

## Facts

The Corporate Debtor, M/s Abir Infrastructure Private Limited, was placed in CIRP on 30.01.2019.

State Bank of India issued a Demand Notice on 28.10.2020 under Rule 7(1) of the Insolvency and Bankruptcy (PG to CD) Rules, 2019 to the appellant stating that Rs. 23,37,11,482.86 was due from the Appellant as Personal Guarantor as on 30.09.2020.

The Adjudicating Authority admitted the Section 95 application on 22.03.2024.

The Appellants claim to have remitted Rs.123.80 crores between 07.09.2018 and 28.10.2019, besides maintaining a 100% cash margin of Rs.20 crores.

The Bank relies on a Guarantee Agreement dated 21.04.2011, wherein Clause 19 stipulates that any certified statement of account issued by the Bank shall be binding and conclusive against guarantors.

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## Issues and analysis

### Issue 1: Whether the pendency of computation disputes before the DRT prevents initiation of insolvency …

**Ratio:** Pendency of DRT proceedings is not a bar for initiating CIRP under Section 7 (or Section

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**Reasoning:** CIRP proceedings are not designed to adjudicate monetary disputes but to determine the

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**Interpretation:** The court interpreted that the legislative intent allows for parallel

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**Application:** The court applied this principle to reject the appellant's argument that the

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## Parties

- **Judges:** Indevar P…; Mohd. Faiz Alam…; +1 more
- **Appellants:** Y.Y. Butch…; Surapaneni…
- **Respondents:** Abir Infrastructur…; State Bank of…
- **Other parties:** Rajesh Ch…
- **Advocates:** S.S.…; Mr.R.S.Sravan…; +6 more

## Timeline

- **2019-01-30 — CIRP Init…**: Corporate Debtor, M/s Abir Infrastructure…
- **2020-10-28 — Demand N…**: State Bank of India issued a…

## 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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