# In the matter of State Bank of India Vs. D Shanti, CP (IB) No. 93/CHE/2021

> NCLT judgment dated 2022-07-21. Citation: TCN-2022-NCLT-01618. The application was filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, read…

- **Court:** NCLT
- **Order date:** 21 Jul 2022
- **Citation:** TCN-2022-NCLT-01618
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-d-shanti-cp-8432b621

## Summary

### Background

The application was filed under Section 95(1) 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 Guarantors) Rules, 2019. State Bank of India, represented by its Assistant General Manager, Stressed Asset Management Branch, filed the application against Smt. D. Shanti, who is the personal guarantor of the corporate debtor, M/s. Leo Primecomp Private Limited. The CIRP process against the corporate debtor was initiated earlier by the Tribunal. The Guarantee Agreement was executed on 03.11.2005. The date of default was 21.12.2018, and the personal guarantee was invoked on 01.07.2020.

## Facts

State Bank of India (SBI) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016 against Smt. D. Shanti, who is the personal guarantor for the corporate debtor, M/s. Leo Primecomp Private Limited. SBI had extended credit facilities to the corporate debtor. The Corporate Insolvency Resolution Process (CIRP) against the corporate debtor had already been initiated by the Tribunal. A guarantee agreement was executed on 03.11.2005. The date of default was 21.12.2018, and the personal guarantee was invoked on 01.07.2020. The application was filed to initiate proceedings against the respondent under Section 95(1) of the IBC. The Hon'ble NCLAT has held that once an application under Section 95 of IBC, 2016 is filed, the Adjudicating

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## Issues and analysis

### Issue 1: Whether the application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 is to …

**Ratio:** The Hon'ble NCLAT has held that once an application under Section 95 of IBC, 2016 is

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**Reasoning:** The court relied on the decision of the Hon'ble NCLAT, which stated that the Adjudicating

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**Interpretation:** Section 95 of the IBC provides for the initiation of insolvency resolution

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**Application:** The court applied the NCLAT's ruling to the present case, stating that the

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## Parties

- **Judges:** (Retd.) S.…; SAMEER…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Leo Primecomp…; D. SH…

## Timeline

- **2005-11-03 — Guarantee Ag…**: Guarantee Agreement…
- **2018-12-21 — Date of D…**: The date of default as…

## 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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