# In the matter of State Bank of India Vs. Awaiz Ahamed, CP(IB) No. 8/BB/2021

> NCLT judgment dated 2022-06-07. Citation: TCN-2022-NCLT-02337. The application was filed by State Bank of India under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 7 Jun 2022
- **Citation:** TCN-2022-NCLT-02337
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-awaiz-ahamed-cp-9a674d22

## Summary

### Background

The application was filed by State Bank of India under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, r/w Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, to initiate Insolvency Resolution Process against Mr. Awaiz Ahamed, the Personal Guarantor for the credit facilities extended to the Corporate Debtor, M/s. Scotts Garments Limited. The Financial Creditor had executed various credit facilities in favor of the Corporate Debtor for which the Respondent stood as the Personal Guarantor. The Corporate Debtor failed to repay the credit facilities. An application was initiated under Section 9 of IBC, 2016 r/w Rule 6 of Insolvency and

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## Facts

State Bank of India filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against Mr. Awaiz Ahamed, who is the Personal Guarantor for credit facilities extended by the Applicant to the Corporate Debtor, M/s. Scotts Garments Limited. The Financial Creditor had extended credit facilities to the Corporate Debtor, and the Respondent stood as the Personal Guarantor. The Corporate Debtor defaulted in repaying the credit facilities. An earlier CIRP against the Corporate Debtor, CP(IB) No.68/BB/2018, was admitted on 13.08.2018, and a moratorium was imposed. A Resolution Plan was approved on 16.09.2019, but the Resolution Applicant failed to comply with the Resolution Plan. The Financial Creditor invoked the Personal Guarantee of Mr. Awaiz Ahamed

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## Issues and analysis

### Issue 1: Whether the application filed under Section 95 of the IBC, 2016 is to be admitted against the …

**Ratio:** Section 100 of the IBC, 2016 states that the Adjudicating Authority shall, within

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**Reasoning:** The Tribunal considered the submissions made by the Learned Counsel appearing for the

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**Interpretation:** The Adjudicating Authority must consider the report submitted by the resolution

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**Application:** Based on the reasons recorded in the report submitted by the Resolution

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## Parties

- **Judges:** Ajay Kumar…; Manoj Kumar…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Scotts…; Awaiz A…

## Timeline

- **2018-08-13 — Admission of CIRP…**: CP(IB) No.68/BB/2018 against M/s. Saravana Distributors was admitted and moratorium was…
- **2019-09-16 — Approval of Resolution…**: The Tribunal approved the Resolution…

## 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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