# In the matter of Md. Javed Sultan (Personal Guarantor) of Emerald Mineral Exim Private Limited CP (IB) No. 25/CB/2021

> NCLT judgment dated 2021-09-21. Citation: TCN-2021-NCLT-01057. The case pertains to an application filed by State Bank of India under Section 95(1) of the…

- **Court:** NCLT
- **Order date:** 21 Sept 2021
- **Citation:** TCN-2021-NCLT-01057
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/md-javed-sultan-personal-guarantor-of-emerald-mineral-exim-private-limited-cp-ib-bc8faedf

## Summary

### Background

The case pertains to an application filed by State Bank of India under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019, for initiating the Insolvency Resolution Process against the personal guarantor, Md. Javed Sultan, who is one of the directors of Emerald Mineral Exim Private Limited (EME). The applicant, State Bank of India, is the financial creditor. EME, the principal borrower company, had requested the applicant for sanction of credit limits, which was granted with an overall limit of ₹11 crore in 2008 and subsequently enhanced to ₹30.74 crore by 2010. The guarantor

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## Facts

State Bank of India (SBI) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, against Md. Javed Sultan, a personal guarantor to the corporate debtor, Emerald Mineral Exim Private Limited (EME). SBI had sanctioned credit facilities to EME, initially at ₹11 crore in 2008, which was later enhanced to ₹30.74 crore by 2010. Md. Javed Sultan executed personal guarantees to secure the repayment of these facilities. EME defaulted on its payment obligations, leading SBI to classify the account as a non-performing asset. SBI also initiated recovery proceedings before the Debts Recovery Tribunal-III, Kolkata. EME was admitted into Corporate Insolvency Resolution Process (CIRP) by the NCLT, Cuttack Bench. SBI issued a demand notice to Md.

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India under Section 95(1) of the Insolvency and …

**Ratio:** Section 95(1) of the Insolvency and Bankruptcy Code, 2016, allows a creditor to file an

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**Reasoning:** The court considered the application and the evidence presented by the applicant, which

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**Interpretation:** Section 95(1) provides a mechanism for creditors to initiate insolvency

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**Application:** The court found that the applicant had clearly brought out in its application

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## Parties

- **Judges:** Rajasekha…; Satya Ranjan…
- **Appellants:** State Bank of…
- **Respondents:** Emerald Mineral…; Md. Javed…

## Timeline

- **2008-02-19 — Initial Loan…**: Financial Creditor sanctioned an overall limit of ₹11 crore to Emerald Mineral Exim…
- **2010-12-28 — Loan Enhan…**: Loan was enhanced to…

## 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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