# In the matter of State Bank of India vs. Mahesh Dhanashree

> NCLT judgment dated 2024-10-01. Citation: TCN-2024-NCLT-00518. The State Bank of India filed a Company Petition under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 1 Oct 2024
- **Citation:** TCN-2024-NCLT-00518
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-mahesh-dhanashree-33438492

## Summary

### Background

The State Bank of India filed a Company Petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process against Mr. Mahesh Dhanashree, the Personal Guarantor of the Corporate Debtor, M/s MSM Steels Private Limited. The Financial Creditor had provided various credit facilities to the Corporate Debtor, and the Respondent had given a personal guarantee in relation to the debts owed by the Corporate Debtor. The Corporate Debtor defaulted on its debt obligations, leading the Financial Creditor to invoke the personal guarantee. The Respondent failed to repay the debt, prompting the Financial Creditor to file the application.

## Facts

State Bank of India (Financial Creditor) filed a petition against Mahesh Dhanashree (Personal Guarantor) under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process. Mahesh Dhanashree is the personal guarantor for M/s MSM Steels Private Limited (Corporate Debtor). The Financial Creditor had extended credit facilities to the Corporate Debtor, for which Mahesh Dhanashree provided a personal guarantee. The Corporate Debtor defaulted on its obligations, leading the Financial Creditor to invoke the guarantee. The total default amount was Rs. 232,65,85,673/- as of 31.03.2023, with further interest from 01.04.2023. The Corporate Debtor's account was classified as Non-Performing Asset on 25.01.2016. The

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 95 of the Insolvency and …

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

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**Reasoning:** The court considered the submissions of the Financial Creditor, the documents annexed to

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

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**Application:** In this case, the Financial Creditor had provided credit facilities to the

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## Parties

- **Judges:** Reeta K…; Madhu S…
- **Appellants:** State Bank of…
- **Respondents:** M/s MSM Steels…; Mahesh Dhan…
- **Advocates:** Subir K…; Disha…; +2 more

## Timeline

- **2016-01-25 — Account Classified as…**: The Corporate Debtor's account was…
- **2016-12-26 — SARFAESI…**: Notice dt. 26.12.2016 u/s 13(4) of the SARFAESI Act, 2002 intimating the possession taken…

## 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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