# In the matter of State Bank of India vs. Ch. Venkateswara Rao

> NCLT judgment dated 2024-02-09. Citation: TCN-2024-NCLT-02666. State Bank of India filed an application under Section 95(1) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 9 Feb 2024
- **Citation:** TCN-2024-NCLT-02666
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-ch-venkateswara-rao-0de22b26

## Summary

### Background

State Bank of India filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 ("IBC") to initiate the Insolvency Resolution Process against the Personal Guarantor, Ch. Venkateswara Rao, who is associated with M/s. Springfield Shelters Private Limited, the Corporate Debtor. The application was filed due to a default on credit facilities taken by M/s. Springfield Shelters Private Limited, for which Ch. Venkateswara Rao had provided a personal guarantee.

## Facts

State Bank of India (SBI) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate the Insolvency Resolution Process against Ch. Venkateswara Rao, the personal guarantor of M/s. Springfield Shelters Private Limited, the Corporate Debtor. M/s. Springfield Shelters Private Limited had taken credit facilities from SBI, and Ch. Venkateswara Rao had given a personal guarantee for the loan. The total debt was Rs. 57,12,05,235/-, and the amount of default was also Rs. 57,12,05,235/-, with the date of default being 02.05.2017. SBI submitted the Guarantee Agreement executed by the Respondent and the Demand Notice. The Demand Notice issued under Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India under Section 95(1) of the IBC for initiating …

**Ratio:** Section 95 of the IBC allows a creditor to apply for initiating an Insolvency Resolution

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**Reasoning:** The court relied on Section 95 of the IBC and the Supreme Court's judgment to determine

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**Interpretation:** Section 95 of the IBC provides the legal basis for a creditor to initiate

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

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** State Bank of…
- **Respondents:** Spring Field…; Springfield…; +1 more

## Timeline

- **2017-05-02 — Date of D…**: The date of default on the credit facilities taken by M/s. Springfield Shelters Private…
- **2021-09-20 — Demand N…**: Demand Notice issued to the Personal Guarantor under Rule 7(1) of the Insolvency and…

## 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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