# In the matter of State Bank of India Vs. Hitesh S Patel, CP (IB)/144/CHE/2021

> NCLT judgment dated 2022-07-15. Citation: TCN-2022-NCLT-01691. The State Bank of India, through its Stressed Asset Management Branch, filed an application…

- **Court:** NCLT
- **Order date:** 15 Jul 2022
- **Citation:** TCN-2022-NCLT-01691
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-hitesh-s-patel-cp-9f9b81fc

## Summary

### Background

The State Bank of India, through its Stressed Asset Management Branch, filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against Mr. Hitesh S Patel, a personal guarantor to M/s. Prabhat Resources Limited (formerly M/s. Shinago Infrastructure & Resources Limited). Prabhat Resources Limited, the corporate debtor, was ordered to be liquidated by the Tribunal on 23.02.2021. The application seeks to initiate a bankruptcy process against the personal guarantor based on a guarantee agreement dated 27.03.2014, with the date of default stated as 19.02.2016 and the invocation of the personal guarantee on 23.09.2020.

## Facts

State Bank of India (SBI), through its Stressed Asset Management Branch, filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, against Mr. Hitesh S Patel, who is a personal guarantor to M/s. Prabhat Resources Limited (formerly M/s. Shinago Infrastructure & Resources Limited). Prabhat Resources Limited, the corporate debtor, was ordered to be liquidated by the Tribunal vide order dated 23.02.2021. The application is based on a guarantee agreement dated 27.03.2014. The date of default is stated as 19.02.2016, and the date of invocation of the Personal Guarantee is 23.09.2020, through a Demand Notice in Form B. The applicant relies on the Recovery Certificate and the admission of the Corporate Insolvency Resolution Process of the

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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(1) of the Insolvency and Bankruptcy Code, 2016 allows a creditor to file an

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**Reasoning:** The court considered the application filed under Section 95(1) of the IBC, 2016, against

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**Interpretation:** Section 95(1) provides a mechanism for creditors to initiate insolvency

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**Application:** The application was filed by the State Bank of India, a creditor, against Mr.

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## Parties

- **Judges:** (Retd.) S.…; SAMEER…
- **Appellants:** State Bank of…
- **Respondents:** Prabhat Resources…; HITESH S…

## Timeline

- **2014-03-27 — Guarantee Ag…**: Guarantee Agreement…
- **2016-02-19 — Date of D…**: 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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