# In the matter of State Bank of India vs. Deepak Kumar Singhania

> NCLT judgment dated 2024-11-28. Citation: TCN-2024-NCLT-00138. The case involves an application filed by the State Bank of India (SBI) under Section 95 of the…

- **Court:** NCLT
- **Order date:** 28 Nov 2024
- **Citation:** TCN-2024-NCLT-00138
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-deepak-kumar-singhania-cc73220d

## Summary

### Background

The case involves an application filed by the State Bank of India (SBI) under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, against Deepak Kumar Singhania, a personal guarantor to LML Limited (Corporate Debtor). SBI sought to initiate the Personal Insolvency Resolution Process (PIRP) against Singhania due to the corporate debtor's default on credit facilities. SBI had initially sanctioned financial assistance to LML Limited in 1996, and Singhania provided personal guarantees to secure these liabilities. LML Limited's account was classified as NPA in 2004, and a multi-partite agreement was executed in 2005 to facilitate loan repayment. The CIRP against LML Limited was admitted in 2017, and the company is currently under liquidation. SBI issued a demand

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## Facts

State Bank of India (SBI) sanctioned financial assistance to M/s LML Limited (Corporate Debtor) in 1996, including a term loan of Rs. 20 crores and a foreign currency credit facility equivalent to Rs. 5 crores. SBI also provided working capital facilities amounting to Rs. 95.50 crores in 2002. Deepak Kumar Singhania stood as a personal guarantor for the credit facilities availed by LML Limited. LML Limited defaulted on repayment, leading to its account being classified as a Non-Performing Asset (NPA) on 31.03.2004. A multi-partite agreement was executed on 28.03.2005 to facilitate loan repayment. LML Limited's CIRP was admitted on 30.05.2017, and it is currently under liquidation. SBI issued a demand notice to Singhania on 04.05.2022 for Rs. 125,05,28,848.56, but he

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## Issues and analysis

### Issue 1: Whether the application under Section 95 of the IBC is maintainable against the personal guarantor, …

**Ratio:** The maintainability of an application under Section 95 of the IBC against a personal

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**Reasoning:** The Tribunal reasoned that for an application against a personal guarantor to be

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**Interpretation:** The interpretation of Section 95 and related rules requires a strict adherence

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**Application:** In this case, the Tribunal found that the Applicant (SBI) failed to establish

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** State Bank of…
- **Respondents:** LML LIM…; Deepak Kumar…

## Timeline

- **1996-05-28 — Financial Assistance…**: SBI initially sanctioned financial assistance of Rs. 25 crores, including a term loan of…
- **2002-10-11 — Working Capital…**: SBI provided working capital facilities…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95 — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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