# In the matter of State Bank of India Vs. A Balakumar, CP (IB) No. 94/CHE/2021

> NCLT judgment dated 2022-07-21. Citation: TCN-2022-NCLT-01611. The State Bank of India filed an application under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 21 Jul 2022
- **Citation:** TCN-2022-NCLT-01611
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-a-balakumar-cp-e0553bfb

## Summary

### Background

The State Bank of India filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against Shri A. Balakumar, who is a personal guarantor to the corporate debtor, M/s. Leo Primecomp Private Limited. The CIRP process against the corporate debtor had been initiated earlier by the Tribunal. The application was filed due to a default that occurred on 21.12.2018, and the personal guarantee was invoked on 01.07.2020.

## Facts

The State Bank of India (SBI) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016 against Shri A. Balakumar, who acted as a personal guarantor for the corporate debtor M/s. Leo Primecomp Private Limited. Credit facilities were extended to the corporate debtor. The Corporate Insolvency Resolution Process (CIRP) against the corporate debtor was initiated earlier. The guarantee agreement was executed on 03.11.2005. The date of default was 21.12.2018, and the personal guarantee was invoked on 01.07.2020 by issuing a demand notice. The application was filed to initiate proceedings against the respondent under Section 95(1) of the IBC. The Hon'ble NCLAT held that once an application under Section 95 of IBC, 2016 is filed, the

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## Issues and analysis

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

**Ratio:** The NCLAT has observed that once an application under Section 95 of the IBC is filed, the

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**Reasoning:** The Tribunal relied on the NCLAT's observation and determined that the application should

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**Interpretation:** Section 95(1) of the IBC allows a creditor to file an application for

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**Application:** Given the NCLAT's observation and the fact that the application was filed under

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## Parties

- **Judges:** (Retd.) S.…; SAMEER…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Leo Primecomp…; A. Bala…
- **Advocates:** R.Sugum…; S. Sathyana…

## Timeline

- **2005-11-03 — Guarantee Ag…**: The Guarantee Agreement…
- **2018-12-21 — Date of D…**: The date of default as…

## 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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