# In the matter of State Bank of India Vs. Shivratan Chandak, CP No IB 71 /95(JPR)/2021

> NCLT judgment dated 2021-12-23. Citation: TCN-2021-NCLT-00037. The State Bank of India (SBI) filed an application under Section 95 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 23 Dec 2021
- **Citation:** TCN-2021-NCLT-00037
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/state-bank-of-india-vs-shivratan-chandak-cp-no-ib-71-95-49e2f26f

## Summary

### Background

The State Bank of India (SBI) filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Mr. Shivratan Chandak, the personal guarantor of Maximum Synthetics Private Limited ('Corporate Debtor'). The Corporate Debtor had availed various credit facilities from SBI but defaulted on payments, leading to liquidation proceedings initiated on 2021-02-09. A demand notice was sent to the personal guarantor on 2021-06-29 regarding the unpaid debt.

## Facts

State Bank of India (SBI) filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Mr. Shivratan Chandak, who is the personal guarantor for Maximum Synthetics Private Limited (the 'Corporate Debtor'). The Corporate Debtor had obtained various credit facilities from SBI but failed to maintain financial discipline, resulting in defaults on payments. Consequently, liquidation proceedings against the Corporate Debtor were initiated on 2021-02-09. A demand notice dated 2021-06-29 was sent to Mr. Chandak, the personal guarantor, regarding the outstanding debt. The total debt from the Personal Guarantor by way of personal guarantee given to the corporate debtor is shown as Rs. 34,78,76,322/-. The

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## 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 creditors to initiate

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**Reasoning:** The court considered the fact that the Corporate Debtor had defaulted on its credit

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**Interpretation:** Section 95 provides a mechanism for creditors to recover their dues from

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**Application:** The court applied the provisions of Section 95 to the facts of the case, noting

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## Parties

- **Judges:** Deep Chandr…; RAGHU N…; +1 more
- **Appellants:** State Bank of…
- **Respondents:** Maximum Synthetics…; Shivratan C…

## Timeline

- **2021-02-09 — Liquidation…**: Liquidation order passed against the Corporate Debtor, Maximum Synthetics Private…
- **2021-06-29 — Demand N…**: Demand notice sent by the Applicant 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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