# In the matter of State Bank of India Vs. A Vasudevan, CP (IB) No. 92/CHE/2021

> NCLT judgment dated 2022-07-21. Citation: TCN-2022-NCLT-01612. 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-01612
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-a-vasudevan-cp-b2f05890

## Summary

### Background

The State Bank of India filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against Mr. A. Vasudevan, who is a personal guarantor for the corporate debtor M/S.Leo Primecomp Private Limited. The corporate insolvency resolution process (CIRP) against the corporate debtor had been 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.

## Facts

State Bank of India (SBI) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016 against Mr. A. Vasudevan, who acted as a personal guarantor for M/S.Leo Primecomp Private Limited, the Corporate Debtor. SBI, represented by its Assistant General Manager, Stressed Asset Management Branch, sought to initiate insolvency proceedings against Mr. Vasudevan due to his guarantee. The Corporate Debtor's CIRP had already been initiated. The Guarantee Agreement was executed on 03.11.2005. The date of default was 21.12.2018, and the invocation of the Personal Guarantee occurred on 01.07.2020 through a Demand Notice. The application was filed to initiate proceedings against the Respondent under Section 95(1) of the Code.

## Issues and analysis

### Issue 1: Whether the application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, …

**Ratio:** The NCLAT has held that once an application under Section 95 of the IBC, 2016 is filed,

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**Reasoning:** The court relied on the NCLAT's observation that the Adjudicating Authority has a duty to

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**Interpretation:** Section 95 of the IBC, 2016 provides for the initiation of insolvency

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**Application:** Based on the NCLAT's ruling, the court admitted the application filed by the

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## Parties

- **Judges:** (Retd.) S.…; SAMEER…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Leo Primecomp…; A. VASU…

## Timeline

- **2005-11-03 — Guarantee Agreement…**: 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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