# 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-01866. The State Bank of India filed an application under Section 95 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 5 Jul 2022
- **Citation:** TCN-2022-NCLT-01866
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-ms-sheela-saxena-cp-11fcc437

## Summary

### Background

The State Bank of India filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against Ms. Sheela Saxena, the personal guarantor to the corporate debtor, M/s Zillion Infraprojects Pvt. Ltd. The corporate debtor had availed credit facilities from the applicant, with an outstanding debt of Rs. 90,73,78,607.30. The applicant had sanctioned financial assistance to the corporate debtor vide sanction letter dated 23.08.2006 which was reviewed and enhanced from time to time. The corporate debtor failed to maintain financial discipline, leading to its account being classified as NPA. A demand notice was issued on 14.06.2018 to the principal borrower and guarantors to repay the outstanding amount

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## Facts

State Bank of India (SBI) extended 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 on 23.08.2006, which was later enhanced to Rs. 100 crores on 15.03.2017. The corporate debtor defaulted, leading to the account being classified as NPA. SBI issued a demand notice on 14.06.2018 for Rs. 44.88 crores. M/s L & T Finance Limited initiated CIRP against Zillion Infraprojects, admitted on 05.02.2019. SBI invoked the guarantee on 09.09.2021. Ms. Sheela Saxena contested the invocation, claiming no privity of contract with SBI, as the guarantee was in favor of SBICAP Trustee Co. Ltd., and that the demand notice was time-barred. SBI argued that the guarantee was

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## Issues and analysis

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

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

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

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**Interpretation:** The Supreme Court's order provided a relaxation in the calculation of the

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**Application:** The exclusion of the period from 15.03.2020 to 28.02.2022 extended 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 — Initial Sa…**: State Bank of India sanctioned financial assistance of Rs. 17 Crores to 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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