# In the matter of State Bank of India vs. Aarti Singal

> NCLT judgment dated 2024-10-07. Citation: TCN-2024-NCLT-00473. The case pertains to an application filed by State Bank of India (SBI) under Section 95 of the…

- **Court:** NCLT
- **Order date:** 7 Oct 2024
- **Citation:** TCN-2024-NCLT-00473
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-aarti-singal-da5c6625

## Summary

### Background

The case pertains to an application filed by State Bank of India (SBI) under Section 95 of the Insolvency and Bankruptcy Code (IBC) against Ms. Aarti Singal, the personal guarantor to the corporate debtor, M/s Bhushan Power and Steel Limited (BPSL). The application seeks initiation of insolvency resolution process against the personal guarantor due to default in repayment of loan facilities availed by BPSL from a consortium of banks, including SBI. The corporate debtor, BPSL, had undergone Corporate Insolvency Resolution Process (CIRP) and a resolution plan was approved. The personal guarantee was invoked by SBI due to the default committed by BPSL. The Adjudicating Authority appointed a Resolution Professional (RP) to submit recommendations regarding the application.

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## Facts

State Bank of India (SBI) filed an application under Section 95 of the Insolvency and Bankruptcy Code (IBC) against Ms. Aarti Singal, the personal guarantor to the corporate debtor, M/s Bhushan Power and Steel Limited (BPSL). BPSL had availed various loan facilities from a consortium of banks, including SBI. Ms. Aarti Singal had extended personal guarantees for the repayment of these facilities. BPSL committed a default and was admitted into Corporate Insolvency Resolution Process (CIRP) by the Adjudicating Authority. A resolution plan submitted by JSW Steel Limited for BPSL was approved. SBI invoked the personal guarantee due to the default committed by BPSL and served a demand notice on Ms. Aarti Singal. The outstanding dues claimed by SBI were INR 12275,91,01,862/-

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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:** The liability of the surety is co-extensive with that of the principal debtor, as per

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**Reasoning:** The Adjudicating Authority relied on various judgments of the Supreme Court, including

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**Interpretation:** Section 95 of the IBC allows creditors to initiate insolvency proceedings

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**Application:** The Adjudicating Authority found that the application filed by SBI met the

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** State Bank of…
- **Respondents:** M/s Bhushan Power…; Aarti S…
- **Advocates:** Arvind…; P. Na…; +10 more

## Timeline

- **2021-01-11 — Filing of P…**: The Petition / Application bearing CP (IB) No. 156/PB/2021 was filed by State Bank of…
- **2017-07-26 — Admission t…**: The Corporate Debtor, BPSL committed a default and was admitted to Corporate Insolvency…

## 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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