# In the matter of State Bank of India Vs. Sanjay Maheshwari, CP (IB)-49-95-JPR-2021

> NCLT judgment dated 2021-09-01. Citation: TCN-2021-NCLT-01230. The State Bank of India filed an application under Section 95 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 1 Sept 2021
- **Citation:** TCN-2021-NCLT-01230
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/state-bank-of-india-vs-sanjay-maheshwari-cp-2ed9a9f9

## Summary

### Background

The State Bank of India filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against Mr. Sanjay Maheshwari, the Personal Guarantor, for the debts of Saga Automotive (I) Pvt Ltd. The Corporate Debtor had obtained credit facilities from the State Bank of India but failed to maintain financial discipline, leading to outstanding amounts. The Corporate Debtor is undergoing Liquidation Process vide order dated 16.03.2021.

## Facts

State Bank of India (SBI) filed an application to initiate Insolvency Resolution Process against Sanjay Maheshwari, who is the personal guarantor for the debts of Saga Automotive (I) Pvt Ltd. Saga Automotive (I) Pvt Ltd, the Corporate Debtor, availed credit facilities from SBI but defaulted on payments. A demand notice dated 29.06.2021 was issued to Sanjay Maheshwari regarding the unpaid debt. The demand notice was sent via speed post but was returned, after which it was affixed to the premises of the respondent on 15.07.2021. The total debt from the Personal Guarantor is Rs. 28,36,04,727.55. The Corporate Debtor is undergoing Liquidation Process vide order dated 16.03.2021. The application was filed on 02.08.2021.

## Issues and analysis

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

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016, allows a creditor to initiate

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**Reasoning:** The court noted that the Corporate Debtor, Saga Automotive (I) Pvt Ltd, had defaulted on

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

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**Application:** The court applied Section 95 to the facts of the case, finding that State Bank

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## Parties

- **Judges:** Ajay Kumar…; RAGHU N…; +1 more
- **Appellants:** State Bank of…
- **Respondents:** Saga Automotive…; Sanjay Mahe…

## Timeline

- **2021-03-16 — Liquidation…**: Order passed by the Tribunal for the…
- **2021-06-29 — Demand N…**: Demand Notice issued by the Creditor to the Personal Guarantor in respect of the unpaid…

## 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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