# In the matter of State Bank of India vs. Hiren Patel

> NCLT judgment dated 2024-11-05. Citation: TCN-2024-NCLT-00299. The case pertains to an application filed by State Bank of India (SBI) under Section 95 of the…

- **Court:** NCLT
- **Order date:** 5 Nov 2024
- **Citation:** TCN-2024-NCLT-00299
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-hiren-patel-9ce61a0a

## Summary

### Background

The case pertains to an application filed by State Bank of India (SBI) under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of the Insolvency Resolution Process (IRP) against Mr. Hiren Patel, who is a personal guarantor to M/s. Archon Engicon Limited, the Corporate Debtor. The application arises from a default of Rs. 341,71,10,539/- in respect of a Deed of Guarantee. The Corporate Debtor had availed loan facilities from SBI, and Mr. Patel stood as a personal guarantor. After the Corporate Debtor defaulted, SBI filed an application to initiate IRP against Mr. Patel as the personal guarantor.

## Facts

State Bank of India (SBI) filed an application under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Insolvency Resolution Process (IRP) against Mr. Hiren Patel, a personal guarantor to M/s. Archon Engicon Limited (Corporate Debtor). The Corporate Debtor defaulted on loan facilities obtained from SBI, leading to a debt of Rs. 341,71,10,539/-. Mr. Patel had executed a Deed of Guarantee in favor of SBI. The account of the Corporate Debtor was declared a Non-Performing Asset (NPA) on 01.02.2016. SBI initiated proceedings before the Debts Recovery Tribunal (DRT), which passed an order on 03.08.2021 in favor of SBI. SBI issued a demand notice to Mr. Patel on 15.12.2021, seeking repayment of the debt. Mr. Patel raised objections, including

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India under Section 95 of the IBC against Mr. Hiren …

**Ratio:** Section 95 of the IBC allows a financial creditor to file an application for initiating

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**Reasoning:** The court considered the report of the Interim Resolution Professional (IRP), which

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**Interpretation:** Section 95 of the IBC provides a mechanism for financial creditors to recover

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**Application:** The court found that the conditions under Section 95 were met, as SBI had filed

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## Parties

- **Judges:** SHAMMI…; SAMEER…
- **Appellants:** State Bank of…
- **Respondents:** Archon Engicon…; Hiren P…

## Timeline

- **2015-07-02 — Deed of Gua…**: Deed of Guarantee executed in…
- **2016-02-01 — NPA Decla…**: Account of the Corporate…

## 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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