# In the matter of State Bank of India vs. Ankit B. Parikh & Ors.

> NCLT judgment dated 2024-02-22. Citation: TCN-2024-NCLT-02460. The State Bank of India, acting as the Financial Creditor, initiated a Company Petition under…

- **Court:** NCLT
- **Order date:** 22 Feb 2024
- **Citation:** TCN-2024-NCLT-02460
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-ankit-b-parikh-ors-7033cb9e

## Summary

### Background

The State Bank of India, acting as the Financial Creditor, initiated a Company Petition under Section 123 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019, to commence bankruptcy proceedings against Mr. Ankit B. Parikh, the Personal Guarantor of Parikh Fabrics Private Limited, the Corporate Debtor. The Corporate Debtor had availed financial assistance and subsequently defaulted, leading to its account being declared NPA on 30.08.2011. Despite an opportunity for a one-time settlement (OTS) in 2016, the Corporate Debtor failed to adhere to the terms, resulting in the cancellation of the OTS. A demand notice

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## Facts

State Bank of India (SBI) extended financial assistance to Parikh Fabrics Private Limited (Corporate Debtor). Mr. Ankit B. Parikh stood as the personal guarantor for the Corporate Debtor. The Corporate Debtor defaulted on its repayment obligations, leading to its account being classified as a Non-Performing Asset (NPA) on August 30, 2011. SBI provided an opportunity for a One-Time Settlement (OTS) in 2016, but the Corporate Debtor failed to comply with the OTS terms. SBI issued a demand notice under Section 13(2) of the SARFAESI Act, 2002, on July 31, 2013, and filed OA No. 188/2014 before the Debts Recovery Tribunal, Hyderabad, to recover outstanding dues. Liquidation proceedings against the Corporate Debtor were initiated under Section 10 of the Insolvency and

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 123 of the Insolvency and …

**Ratio:** Section 123 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7 of the

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**Reasoning:** The court considered the fact that the Corporate Debtor had defaulted on its debt

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**Interpretation:** Section 123 of the IBC, when read with Rule 7 of the relevant rules, provides a

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**Application:** The court applied the provisions of Section 123 of the IBC and Rule 7 of the

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** State Bank of…
- **Respondents:** Parikh Fabrics…; Mr.Ankit B.…

## Timeline

- **2011-08-30 — Account decla…**: The account of the Corporate Debtor was…
- **2016-01-01 — Opportunity…**: An opportunity was given to the Corporate Debtor to settle the accounts under One-Time…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 121 — Application for bankruptcy](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-121)

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