# In the matter of State Bank of India Vs. Jaya Singh CP No. (IB)-411 (ND)-2021.

> NCLT judgment dated 2021-08-16. Citation: TCN-2021-NCLT-01328. The State Bank of India filed an application under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 16 Aug 2021
- **Citation:** TCN-2021-NCLT-01328
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/state-bank-of-india-vs-jaya-singh-cp-no-15196f1e

## Summary

### Background

The State Bank of India filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC) read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for IRP for Personal Guarantors to Corporate Debtor) Rules, 2019, to initiate the Insolvency Resolution Process against Ms. Jaya Singh, the Personal Guarantor of M/s. Energo Engineering Projects Limited, the Corporate Debtor. The applicant claimed that the corporate debtor defaulted on credit facilities amounting to Rs. 794,00,32,924.21 as of 15.12.2018, and Ms. Jaya Singh had executed personal guarantee deeds. The applicant invoked the guarantee by sending a recall notice dated 24.12.2018 to both the Corporate Debtor and the Personal Guarantor. Liquidation proceedings

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## Facts

State Bank of India (SBI) filed an application to initiate the Insolvency Resolution Process (IRP) against Ms. Jaya Singh, who is the personal guarantor for M/s. Energo Engineering Projects Limited (Corporate Debtor). SBI claimed that the Corporate Debtor defaulted on credit facilities amounting to Rs. 794,00,32,924.21 as of 15.12.2018. These credit facilities were disbursed by SBI and its subsidiary banks, including State Bank of Mysore, State Bank of Hyderabad, State Bank of Bikaner & Jaipur, and State Bank of Travancore, which have since merged with SBI. Ms. Jaya Singh executed personal guarantee deeds in favor of SBI. SBI invoked the guarantee by sending a recall notice dated 24.12.2018 to the Corporate Debtor and Ms. Jaya Singh. Liquidation proceedings against

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## Issues and analysis

### Issue 1: Whether the application under Section 95(1) of the IBC is maintainable when the demand notice under …

**Ratio:** Section 95(4)(b) of the IBC 2016 mandates that a demand notice must be served on the

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**Reasoning:** The court found that the applicant failed to serve the demand notice to the Personal

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**Interpretation:** The requirement of serving a demand notice to the personal guarantor is a

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**Application:** In this case, since the demand notice was not served to Ms. Jaya Singh, the

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; L. N. G…
- **Appellants:** State Bank of…
- **Respondents:** Energo Engineering…; Jaya S…

## Timeline

- **2013-02-02 — Deed of Gua…**: Deed of Guarantee dated 02.02.2013 executed by Sh. Dinesh B Singh & Jaya Singh in favour…
- **2014-06-11 — Deed of Gua…**: Deed of Guarantee dated 11.06.2014 executed by Sh. Dinesh B Singh & Jaya Singh in favour…

## 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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