# In the matter of State Bank of India vs. Anitha Agarwal

> NCLT judgment dated 2025-01-30. Citation: TCN-2025-NCLT-00555. The State Bank of India initiated insolvency proceedings against Anitha Agarwal, the personal…

- **Court:** NCLT
- **Order date:** 30 Jan 2025
- **Citation:** TCN-2025-NCLT-00555
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-anitha-agarwal-cfa2d455

## Summary

### Background

The State Bank of India initiated insolvency proceedings against Anitha Agarwal, the personal guarantor of Ashok Magnetics Limited, a corporate debtor. Ashok Magnetics Limited had availed credit facilities from a consortium of banks, including State Bank of India, and defaulted on repayment, leading to its classification as NPA on 17.01.2015. CIRP was initiated against the Corporate Debtor on 04.09.2017, followed by liquidation on 09.11.2018. The Financial Creditor filed an application under Section 95 of IBC against the Personal Guarantor, Anitha Agarwal, due to the default. The Respondent raised objections regarding the limitation period, arguing that the application was filed beyond the prescribed period. The Financial Creditor contended that an OTS letter dated

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## Facts

Ashok Magnetics Limited (AML), initially incorporated as AML Steel Limited on 01.08.2005 and later renamed on 27.04.2015, approached State Bank of India (SBI) for a term loan to purchase a 6-seater aircraft. SBI sanctioned a term loan of Rs. 1.10 Crore on 07.12.2007, secured by the aircraft and personal guarantees from Ashok Agarwal and Anitha Agarwal. AML executed a loan agreement, hypothecation, and pledge agreements on 08.12.2007, along with guarantee deeds from Ashok Agarwal, Anitha Agarwal, and Ashok Memory (India) Pvt Ltd. AML later sought renewal and enhancement of credit facilities, resulting in SBI sanctioning Rs. 25.77 Crores on 18.11.2009. AML and the guarantors executed supplemental agreements on 19.11.2009. Ashok Agarwal, Anitha Agarwal, Ajay Agarwal, and

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## Issues and analysis

### Issue 1: Whether the application filed under Section 95 of the IBC against the Personal Guarantor is barred …

**Ratio:** Section 18 of the Limitation Act posits that a fresh period of limitation shall be

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**Reasoning:** The court reasoned that the OTS letter dated 15.07.2017 issued by the Corporate Debtor

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**Interpretation:** The court interpreted Section 18 of the Limitation Act to mean that any

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**Application:** The court applied the ratio to the facts of the case, noting that the OTS

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** State Bank of…
- **Respondents:** Ashok Magnetics…; Anitha Ag…
- **Advocates:** M.L. Ga…; Rajesh…

## Timeline

- **2005-08-01 — Incorporation of AML…**: Ashok Magnetics Limited was initially…
- **2007-12-07 — Sanction of T…**: State Bank of India sanctioned a term loan of…

## 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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