# In the matter of Md. Majeeb Sultan (Personal Guarantor) Emerald Mineral Exim Private Limited CP (B) No. 23-CB-2021

> NCLT judgment dated 2021-09-21. Citation: TCN-2021-NCLT-01061. The case involves 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-01061
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/md-majeeb-sultan-personal-guarantor-emerald-mineral-exim-private-limited-cp-b-no-f2423139

## Summary

### Background

The case involves 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, to initiate the Insolvency Resolution Process against the personal guarantor, Md. Majid Sultan, who is a director of Emerald Mineral Exim Private Limited (EME). The financial creditor, State Bank of India, had sanctioned credit limits to EME, which were enhanced over time. To secure these limits, the guarantor executed guarantee documents.

## Facts

State Bank of India (SBI) filed an application against Md. Majid Sultan, a personal guarantor to Emerald Mineral Exim Private Limited (EME), under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016. SBI, as the financial creditor, had sanctioned credit limits to EME, which were enhanced to ₹30.74 crore by a sanction letter dated 28.12.2010. Md. Majid Sultan executed personal guarantees on 18.01.2011 and 24.07.2013 in favor of SBI to secure the repayment of the facility agreements. EME defaulted on payments, leading SBI to classify the account as a non-performing asset. SBI issued a demand notice on 22.06.2020 to the guarantor for ₹74,09,97,965.73, inclusive of interest calculated up to 29.02.2020. EME was admitted under CIRP by the National Company Law

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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 apply for

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**Reasoning:** The court considered the application and the evidence presented by State Bank of India,

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**Interpretation:** Section 95(1) provides a mechanism for creditors to recover debts from personal

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**Application:** The court applied Section 95(1) to the facts of the case, noting that State

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## Parties

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

## Timeline

- **2008-02-19 — Sanction…**: Financial Creditor sanctioned an overall limit of ₹11 crore to Emerald Mineral Exim…
- **2010-12-28 — Enhanced…**: The loan was enhanced to ₹30.74…

## 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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