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

> NCLT judgment dated 2024-02-09. Citation: TCN-2024-NCLT-02658. 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-02658
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-ch-venkateswara-rao-9b371ced

## 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 the Respondent. The Respondent is associated with M/s. Springfield Shelters Private Limited, the Corporate Debtor. M/s. Springfield Shelters Private Limited had taken credit facilities from the Applicant, and the Respondent had given a personal guarantee for the loan. The application details the total debt as Rs. 57,12,05,235/- and the amount of default as Rs. 57,12,05,235/-, with the date of default being 02.05.2017. The Applicant has submitted the Guarantee Agreement executed by the Respondent and the Demand Notice. The Demand Notice was

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## Facts

State Bank of India (Applicant) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Ch. Venkateswara Rao (Respondent), who acted as a personal guarantor for credit facilities availed by M/s. Springfield Shelters Private Limited (Corporate Debtor). The total debt and the amount of default are both Rs. 57,12,05,235/-, with the default date being 02.05.2017. The Applicant submitted the Guarantee Agreement and a Demand Notice dated 20.09.2021. The Demand Notice was issued under Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019. The relevance of these facts lies in

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India under Section 95(1) of the Insolvency and …

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

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

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**Interpretation:** Section 95 of the IBC is interpreted to mean that a creditor can initiate the

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**Application:** Based on the facts presented, State Bank of India, being a creditor, has filed

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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…
- **2021-09-20 — Demand Notice…**: The Demand Notice was issued to the…

## 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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