# In the matter of State Bank of India vs. Basani Vijaya Bhaskar Reddy

> NCLT judgment dated 2022-02-04. Citation: TCN-2022-NCLT-04255. The case involves an application filed by the State Bank of India (Financial Creditor) under…

- **Court:** NCLT
- **Order date:** 4 Feb 2022
- **Citation:** TCN-2022-NCLT-04255
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-basani-vijaya-bhaskar-reddy-9d94c4f9

## Summary

### Background

The case involves an application filed by the State Bank of India (Financial Creditor) under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process against the Personal Guarantors to Corporate Debtor) Rules, 2019, to initiate the Insolvency Resolution Process against Mr. Basani Vijaya Bhaskar Reddy, the Personal Guarantor of the Corporate Debtor, Indu Projects Limited. Indu Projects Limited, engaged in infrastructure construction, had availed financial assistance from the Financial Creditor and its associate banks. Mr. Reddy had executed a Guarantee Agreement to secure the repayment of this financial assistance. Due to operational

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## Facts

The State Bank of India (SBI), acting as the Financial Creditor, extended financial assistance to Indu Projects Limited, the Corporate Debtor, for its infrastructure construction business. Mr. Basani Vijaya Bhaskar Reddy acted as the Personal Guarantor, securing the repayment of the financial assistance. Indu Projects Limited faced operational stress and defaulted on its debt obligations, leading to restructuring efforts under the Corporate Debt Restructuring (CDR) Cell. A Master Restructuring Agreement (MRA) was executed on 2012-09-28. However, the Corporate Debtor's account was classified as a Non-Performing Asset (NPA) on 2014-09-15. SBI initiated recovery measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 95(1) of the Insolvency and …

**Ratio:** Section 95(1) of the IBC, 2016, allows a financial creditor to file an application for

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**Reasoning:** The Adjudicating Authority considered the provisions of Section 95(1) of the IBC and the

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**Interpretation:** Section 95(1) of the IBC provides a mechanism for financial creditors to

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**Application:** In this case, the Financial Creditor filed the application under Section 95(1)

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## Parties

- **Judges:** Bhaskara Pantula…; BINOD KUMAR…
- **Appellants:** State Bank of…
- **Respondents:** Indu Projects…; Basani Vijaya…

## Timeline

- **2012-09-28 — Master Restructuring…**: The Corporate Debtor, Financial Creditor, its associate banks, and other lenders entered…
- **2014-09-15 — Account Classified as…**: The account of the Corporate Debtor was…

## 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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