# In the matter of State Bank of India vs. Madhavi Latha

> NCLT judgment dated 2024-02-02. Citation: TCN-2024-NCLT-02799. State Bank of India, through its Stressed Assets Management Branch, filed an application under…

- **Court:** NCLT
- **Order date:** 2 Feb 2024
- **Citation:** TCN-2024-NCLT-02799
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-madhavi-latha-c474ed60

## Summary

### Background

State Bank of India, through its Stressed Assets Management Branch, filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against the Personal Guarantor/Respondent, Mrs. Madhavi Latha, who is associated with M/s. MPL Cars Private Limited, the Corporate Debtor. CIRP had been initiated against the Corporate Debtor vide an order dated 13.08.2019.

## Facts

State Bank of India (SBI) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Insolvency Resolution Process against Mrs. Madhavi Latha, the personal guarantor for a loan taken by M/s. MPL Cars Private Limited. MPL Cars Private Limited, the Corporate Debtor, had previously undergone Corporate Insolvency Resolution Process (CIRP) initiated on 13.08.2019. MPL Cars Private Limited failed to repay the debt, leading SBI to initiate CIRP against the Corporate Debtor. Mrs. Madhavi Latha had given a personal guarantee for the loan. The outstanding debt is Rs. 36,50,28,970/-, with the date of default being 06.03.2019. SBI issued a Demand Notice under Rule 7(1) of the Insolvency and Bankruptcy Rules, 2019, to Mrs. Madhavi Latha

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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 of the IBC allows a creditor to apply for initiating an Insolvency Resolution

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**Reasoning:** The court considered the averments made in the application and the fact that the

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

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**Application:** The court found that the Applicant had provided the necessary details and

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## Parties

- **Judges:** Shri. JYOTI KUMAR…; SHRI. RAVICHANDRAN…
- **Appellants:** State Bank of…
- **Respondents:** MPL Cars Private…; Madhavi…

## Timeline

- **2019-08-13 — CIRP Init…**: CIRP was initiated against MPL Cars Private…
- **2019-03-06 — Date of D…**: Date of default is…

## 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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