# In the matter of State Bank of India Vs. Farah Khan, CP (IB) No.950(PB)/2020

> NCLT judgment dated 2022-04-06. Citation: TCN-2022-NCLT-03344. The case involves an application filed by the State Bank of India (SBI) under Section 95 read…

- **Court:** NCLT
- **Order date:** 6 Apr 2022
- **Citation:** TCN-2022-NCLT-03344
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-farah-khan-cp-58bb1df0

## Summary

### Background

The case involves an application filed by the State Bank of India (SBI) under Section 95 read with Rule 7(2) of the IBC, seeking to initiate the Insolvency Resolution Process against the Respondent/Guarantor, Farah Khan, and others who acted as personal guarantors for a loan facility availed by M/s. Multiwal Pulp and Board Mills Private Limited. A resolution plan for the corporate debtor had already been approved by the Committee of Creditors (CoC).

## Facts

State Bank of India (SBI) filed an application under Section 95 of the Insolvency and Bankruptcy Code (IBC) against Farah Khan, a personal guarantor to the loan availed by M/s. Multiwal Pulp and Board Mills Private Limited. The Corporate Debtor failed to maintain financial discipline, leading SBI to issue a legal demand notice on 2018-08-07. Despite the notice, the outstanding amount was not repaid. SBI had previously filed an Original Application against the Corporate Debtor and the Guarantors before the Debts Recovery Tribunal (DRT-II), New Delhi, which is still pending. In 2017, the Corporate Debtor and the Guarantor approached SBI for a settlement, which SBI accepted. However, they failed to comply with the settlement terms, leading SBI to revoke the settlement on

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India under Section 95 of the IBC should be admitted …

**Ratio:** Section 100 of the IBC allows for the admission of an application for initiating the

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**Reasoning:** The Adjudicating Authority relied on the report submitted by the Resolution Professional,

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**Interpretation:** Section 95 of the IBC outlines the procedure for initiating insolvency

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**Application:** Based on the RP's report and the satisfaction that the application met the

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## Parties

- **Judges:** DHARMINDER…; AVINASH K.…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Multiwal…; Farah…

## Timeline

- **2015-08-07 — Legal Demand…**: SBI issued a Legal Demand Notice to…
- **2017-01-01 — Settlement A…**: In the year 2017, the Corporate Debtor and the Guarantor approached SBI for settlement of…

## 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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