# In the matter of State Bank of India Vs. Mr. Badri Kasturi, CP (IB) No. 400/95/HDB/2020

> NCLT judgment dated 2022-03-31. Citation: TCN-2022-NCLT-03450. The State Bank of India (Financial Creditor) filed a petition under Section 95 of the…

- **Court:** NCLT
- **Order date:** 31 Mar 2022
- **Citation:** TCN-2022-NCLT-03450
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-mr-badri-kasturi-cp-34fe1502

## Summary

### Background

The State Bank of India (Financial Creditor) filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 7(2) of the Insolvency & Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019, seeking initiation of the Insolvency Resolution Process against Shri Badri Kasturi, the Personal Guarantor of PPS Enviro Power Private Limited. The corporate debtor availed credit facilities amounting to Rs. 225.94 crores from the Financial Creditor/SBI and its associate banks. The corporate debtor is the principal borrower and personal guarantor, standing as guarantor to secure the repayment of the financial assistance. The outstanding debt as of 2017-12-06

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## Facts

The State Bank of India (SBI), acting as the Financial Creditor, extended credit facilities amounting to Rs. 225.94 crores to PPS Enviro Power Private Limited, the Corporate Debtor. These facilities were availed over time, with SBI and its associate banks, including the erstwhile State Bank of Travancore, participating. The Corporate Debtor, also acting as the Personal Guarantor, provided guarantees to secure the repayment of the financial assistance. As of 2017-12-06, the outstanding debt amounted to Rs. 237,84,44,380.77, including interest and other costs. The Corporate Debtor's accounts were classified as Non-Performing Asset (NPA) on 2015-12-26. A recall notice was issued to the Personal Guarantor on 2017-10-11, demanding payment by 2017-10-21, leading to a default

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## Issues and analysis

### Issue 1: Whether Corporate Insolvency Resolution Process can be ordered against respondent no.1/ Personal …

**Ratio:** The liability of the personal guarantor is coextensive with that of the corporate debtor,

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**Reasoning:** The Tribunal considered that the Corporate Debtor was already under liquidation and that

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**Interpretation:** The legal issue revolves around whether the insolvency resolution process can

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**Application:** Given that the Corporate Debtor is under liquidation, the Personal Guarantor's

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## Parties

- **Judges:** N. Venkata…; Veera Brahma Rao…
- **Appellants:** State Bank of…
- **Respondents:** PPS Enviro Power…; Badri Ka…

## Timeline

- **2015-12-26 — Account Classi…**: The accounts of the Corporate Debtor were…
- **2017-10-11 — Recall N…**: A recall notice was issued to the Personal Guarantor demanding payment of outstanding…

## 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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