# In the matter of State Bank of India Vs. Ms. Sheela Saxena, CP (IB)/747(PB)/2021

> NCLT judgment dated 2022-07-05. Citation: TCN-2022-NCLT-01871. The State Bank of India filed an application under Section 95 r/w Rule 7(2) of the Insolvency…

- **Court:** NCLT
- **Order date:** 5 Jul 2022
- **Citation:** TCN-2022-NCLT-01871
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-ms-sheela-saxena-cp-0e818ad6

## Summary

### Background

The State Bank of India filed an application under Section 95 r/w Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantor to Corporate Debtor) Rules, 2019, to initiate the Insolvency Resolution Process against the Respondent/Guarantor, Ms. Sheela Saxena, who stood as Personal Guarantor to the credit facilities availed by the Corporate Debtor, M/s Zillion Infraprojects Pvt. Ltd. The total outstanding debt was Rs. 90,73,78,607.30. The Tribunal appointed Mr. Rakesh Kumar Gupta as the Resolution Professional to file a report under Section 99 of the Code.

## Facts

State Bank of India (SBI) sanctioned financial assistance to M/s Zillion Infraprojects Pvt. Ltd., with Ms. Sheela Saxena acting as the personal guarantor. The initial sanction was for Rs. 17 crores, later enhanced to Rs. 100 crores. The corporate debtor defaulted, leading to the account being classified as NPA. SBI issued a demand notice to the principal borrower and guarantors for Rs. 44.88 crores. Ms. Saxena, the guarantor, claimed no privity of contract with SBI, arguing the guarantee deed was with SBICAP Trustee Co. Ltd. She also contended the demand notice was time-barred, issued more than three years after the default date of 29.06.2018. SBI initiated Corporate Insolvency Resolution Process (CIRP) against Zillion Infraprojects, admitted by NCLT on 05.02.2019. The

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial …

**Ratio:** The Hon'ble Supreme Court's order dated 10.01.2022 in suo moto writ petition 3/2020

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**Reasoning:** The Resolution Professional stated that the application filed by the Financial Creditor

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**Interpretation:** The limitation period for filing an application under the IBC is subject to

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**Application:** The Tribunal accepted the Resolution Professional's statement that the

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## Parties

- **Judges:** Ramalingam…; Sh. Avinash Kumar…
- **Appellants:** State Bank of…
- **Respondents:** M/S ZILLION…; Sheela S…

## Timeline

- **2006-08-23 — Sanction…**: State Bank of India sanctioned financial assistance of Rs. 17 Crores to M/s Zillion…
- **2017-03-15 — Last Loan S…**: Last loan sanction of…

## 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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