# In the matter of State Bank of India Vs. M S Sriharsha, CP (IB) No.76/BB/2021

> NCLT judgment dated 2022-03-29. Citation: TCN-2022-NCLT-03487. The State Bank of India filed an application under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 29 Mar 2022
- **Citation:** TCN-2022-NCLT-03487
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-m-s-sriharsha-cp-12650158

## Summary

### Background

The State Bank of India filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against Mr. M.S. Sriharsha, the personal guarantor for credit facilities extended to the Corporate Debtor, M/s. Sura Leathers Private Limited. The Corporate Debtor was classified as a Non-Performing Asset on 28.12.2017 after failing to repay the credit facilities. An earlier Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor by Vansun Intermediaries Pvt. Ltd. which was admitted on 31.05.2019, and a moratorium was imposed. The CIRP resulted in failure, and liquidation was ordered on 25.02.2020, which is currently pending. The Applicant Bank issued a Demand Notice on

…

## Facts

State Bank of India (SBI) extended credit facilities to M/s. Sura Leathers Private Limited ('Corporate Debtor'). Mr. M.S. Sriharsha acted as the personal guarantor for these facilities. The Corporate Debtor defaulted on its repayment obligations, leading SBI to classify the account as a Non-Performing Asset (NPA) on 28.12.2017. An earlier Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor by Vansun Intermediaries Pvt. Ltd., which was admitted on 31.05.2019, and a moratorium was imposed. The CIRP failed, and liquidation was ordered on 25.02.2020. SBI issued a Demand Notice dated 14.08.2018 to Mr. M.S. Sriharsha, invoking the personal guarantee and demanding payment of Rs 29,50,45,488.69/- as of 09.03.2021. SBI then filed an

…

## Issues and analysis

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

**Ratio:** Section 95(1) of the IBC, 2016 allows a creditor to apply for initiating the Insolvency

…

**Reasoning:** The Tribunal relied on the Resolution Professional's report, which confirmed that the

…

**Interpretation:** Section 95(1) provides a mechanism for creditors to recover debts from personal

…

**Application:** In this case, the Financial Creditor (SBI) demonstrated that the Personal

…

## Parties

- **Judges:** Ajay Kumar…; Manoj Kumar…
- **Appellants:** State Bank of…
- **Respondents:** M/s Sura Leathers…; M.S.Srih…

## Timeline

- **2017-12-28 — Corporate Debtor…**: The account of M/s. Sura Leathers Private Limited was classified as a Non-Performing…
- **2019-05-31 — CIRP Initiated Against…**: Corporate Insolvency Resolution Process (CIRP) was initiated against M/s. Sura Leathers…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-m-s-sriharsha-cp-12650158