# In the matter of State Bank of India vs. Ishwarlal Shankarlal Lalwani (Jain)

> NCLT judgment dated 2024-10-30. Citation: TCN-2024-NCLT-00316. The case involves a Company Petition (IB) No. 835 of 2023 filed by State Bank of India (the…

- **Court:** NCLT
- **Order date:** 30 Oct 2024
- **Citation:** TCN-2024-NCLT-00316
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-ishwarlal-shankarlal-lalwani-16e9e9d1

## Summary

### Background

The case involves a Company Petition (IB) No. 835 of 2023 filed by State Bank of India (the Financial Creditor) under Section 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019, seeking to initiate Personal Insolvency Resolution Process against Mr. Ishwarlal Shankarlal Lalwani (Jain) (the Personal Guarantor). The petitioner had extended credit to Rajmal Lakhichand Jewellers Private Limited, the Corporate Debtor. The Corporate Debtor defaulted in repayment, leading to the account being declared a Non-Performing Asset. The petitioner issued a demand/recall notice under SARFAESI to the corporate

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## Facts

State Bank of India (SBI), the Financial Creditor, filed a Company Petition (IB) No. 835 of 2023 against Mr. Ishwarlal Shankarlal Lalwani (Jain), the Personal Guarantor, under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016. SBI had extended financial facilities to M/s Rajmal Lakhichand Jewellers Private Limited, the Corporate Debtor, which were secured by the personal guarantee of Mr. Lalwani. The Corporate Debtor defaulted in repayment, leading to its account being classified as a Non-Performing Asset (NPA) on 29.03.2013 with an outstanding amount of Rs. 541.40 Crores. SBI issued a demand/recall notice on 20.05.2016 under the SARFAESI Act. The Personal Guarantor defaulted on payment of Rs. 5,71,41,34,813.21 as of 31.05.2022. SBI had also initiated CIRP

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## Issues and analysis

### Issue 1: Whether the application under Section 95 of the Insolvency and Bankruptcy Code, 2016 for initiating …

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016 allows a creditor to initiate

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**Reasoning:** The court considered the provisions of Section 95 of the IBC and the related rules. The

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**Interpretation:** Section 95 provides a mechanism for creditors to recover debts from personal

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**Application:** The application is maintainable because the Corporate Debtor defaulted on its

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## Parties

- **Judges:** LAKSHMI G…; Charanjeet Singh…
- **Appellants:** State Bank of…
- **Respondents:** Rajmal Lakhichand…; Ishwarlal…

## Timeline

- **2006-01-28 — Sanction…**: The Petitioner extended Demand Cash Credit/ Working Capital Term Loan to the Corporate…
- **2013-03-29 — NPA Decla…**: The Corporate Debtor's account was…

## 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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