# In the matter of Surana Power Ltd. (SBI Vs. .........Guarantors of CD) Main CP No. 646-IB-CB-2018 & CP Nos. 713, 936, 1031 & 1032-2018

> NCLT judgment dated 2018-10-30. Citation: TCN-2018-NCLT-00437. The State Bank of India filed separate and independent Company Petitions under Section 60(2) of…

- **Court:** NCLT
- **Order date:** 30 Oct 2018
- **Citation:** TCN-2018-NCLT-00437
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/surana-power-ltd-sbi-vs-guarantors-of-cd-main-cp-no-646-ib-cb-2018-cp-nos-713-93-1847cd2a

## Summary

### Background

The State Bank of India filed separate and independent Company Petitions under Section 60(2) of the Insolvency and Bankruptcy Code against personal guarantors (Mr. Vijaraj Surana, Mr. Dinesh Chand Surana, Mr. Gowthamraj Surana, and Mr. Shantilal Surana) of M/s Surana Power Limited, a corporate debtor. The bank sought to initiate insolvency resolution processes against these personal guarantors, arguing that creditors can initiate insolvency proceedings against guarantors before the NCLT where CIRP is pending against the corporate debtor. The respondents argued that NCLT lacks jurisdiction because Part-III of the Code, which deals with insolvency resolution for individuals and partnership firms, has not been notified.

## Facts

M/s. State Bank of India (SBI) filed company petitions against Mr. Vijaraj Surana, Mr. Dinesh Chand Surana, Mr. Gowthamraj Surana, and Mr. Shantilal Surana, who are personal guarantors to a loan availed by M/s. Surana Power Limited, the corporate debtor. SBI initiated these proceedings under Section 60(2) of the Insolvency and Bankruptcy Code (IBC), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the personal guarantors. The corporate debtor, M/s. Surana Power Limited, defaulted on its loan repayment to SBI. A Section 9 proceeding was initiated against the corporate debtor, and an Interim Resolution Professional (IRP) was appointed. The respondents, being the personal guarantors, argued that the NCLT lacks jurisdiction to deal with these

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## Issues and analysis

### Issue 1: Whether the NCLT has jurisdiction to entertain insolvency proceedings against personal guarantors …

**Ratio:** The jurisdiction of the NCLT to deal with insolvency proceedings against personal

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**Reasoning:** The court reasoned that the power to deal with personal guarantors is to be percolated to

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**Interpretation:** Section 60(4) of the IBC states that the Tribunal shall be vested with all the

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**Application:** In this case, since Part-III of the IBC has not been notified, the NCLT lacks

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** M/s. State Bank…
- **Respondents:** M/s. SURANA POWER…; Vijaraj S…

## Timeline

- **2016-12-01 — Notification of Section…**: Section 60(2) of the Code was notified, conferring power upon NCLT to proceed against…
- **2017-08-28 — Government Clar…**: The Government of India issued a press release clarifying that Section 243 of the Code,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(2) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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