# In the matter of State Bank of India vs. Mohan Lal Agarwal

> NCLT judgment dated 2024-04-02. Citation: TCN-2024-NCLT-01885. The case involves a petition filed by State Bank of India (SBI) under Section 95(1) of the…

- **Court:** NCLT
- **Order date:** 2 Apr 2024
- **Citation:** TCN-2024-NCLT-01885
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-mohan-lal-agarwal-7200d60f

## Summary

### Background

The case involves a petition filed by State Bank of India (SBI) under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, against Mohan Lal Agarwal, a personal guarantor to Adhunik Alloys & Power Limited, the Corporate Debtor. SBI seeks to initiate the insolvency resolution process against the personal guarantor due to the Corporate Debtor's failure to repay a debt amounting to Rs. 359,00,60,297.86. The Corporate Debtor had approached SBI for various financial facilities, which were extended on 20.02.2014. A Deed of Guarantee was executed on the same date by the Personal Guarantor. The Corporate Debtor's account was classified as a non-performing asset (NPA). SBI had previously filed a petition under section 19 of the Recovery of Debts Due to Banks and

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## Facts

State Bank of India (SBI) filed a petition under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, against Mohan Lal Agarwal, who is the personal guarantor for Adhunik Alloys & Power Limited (Corporate Debtor). The Corporate Debtor owes SBI Rs. 359,00,60,297.86. The Corporate Debtor had approached SBI for financial facilities, which were granted on 20.02.2014. Mohan Lal Agarwal executed a Deed of Guarantee on 20.02.2014. The Corporate Debtor defaulted on repayments, leading SBI to classify the account as a non-performing asset (NPA). SBI had previously filed a petition under section 19 of the Recovery of Debts Due to Banks and Financial Institution Act, 1993, against the guarantor, which is currently pending. SBI issued a Demand Notice in Form B on

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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 Insolvency and Bankruptcy Code, 2016, read with Rule 7 of the

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**Reasoning:** The court considered the factual matrix of the case, including the debt owed by the

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**Interpretation:** Section 95 provides the mechanism for initiating insolvency resolution process

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**Application:** In this case, the court found that SBI's application was complete and met the

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## Parties

- **Judges:** Rohit K…; Balraj…; +1 more
- **Appellants:** State Bank of…
- **Respondents:** Adhunik Alloys &…; Mohan Lal A…

## Timeline

- **2014-02-20 — Credit Facilities…**: Applicant extended various Credit facilities to Corporate Debtor and granted Cash Credit…
- **2021-07-17 — Demand Notice…**: Applicant issued a Demand Notice in Form B under Rule 7(1) of the IB Rules, 2019, but no…

## 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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