# In the matter of State Bank of India vs. Narayan Pundlik Shenvi Prabhu

> NCLT judgment dated 2024-11-13. Citation: TCN-2024-NCLT-00246. The case involves a petition filed by State Bank of India (Financial Creditor/Applicant) under…

- **Court:** NCLT
- **Order date:** 13 Nov 2024
- **Citation:** TCN-2024-NCLT-00246
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-narayan-pundlik-shenvi-prabhu-92602b0f

## Summary

### Background

The case involves a petition filed by State Bank of India (Financial Creditor/Applicant) under Section 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019. The petition seeks to initiate an insolvency resolution process against Mr. Narayan Pundlik Shenvi Prabhu (Personal Guarantor/Respondent) for the recovery of a debt amounting to INR 89,89,34,410.64. The dates of default are specified as 14.08.2019 and 23.07.2021, relating to demand notices issued to the Personal Guarantor.

## Facts

State Bank of India (SBI) filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate insolvency resolution against Mr. Narayan Pundlik Shenvi Prabhu, who acted as a personal guarantor for credit facilities sanctioned to Aditya Vidyut Appliances Limited. The debt amount is INR 89,89,34,410.64 as of 30.06.2021. The Corporate Debtor, Aditya Vidyut Appliances Limited, was sanctioned credit facilities around 2008, which were subsequently renewed in 2017. Mr. Prabhu executed a Supplemental Deed of Guarantee dated 29.05.2018 in favor of SBI, providing an irrevocable and continuing guarantee for the repayment of facilities availed by the Corporate Debtor. The Corporate Debtor's account was classified as NPA w.e.f. 16.10.2018,

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## Issues and analysis

### Issue 1: Whether the petition filed under Section 95 of the Insolvency and Bankruptcy Code, 2016, is …

**Ratio:** The liability of a surety is co-extensive with that of the principal debtor. The Tribunal

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**Reasoning:** The Tribunal considered the documents on record, the submissions made by the Financial

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**Interpretation:** The legal principle of co-extensive liability of a surety means that the

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**Application:** The Tribunal applied the principle of co-extensive liability to the facts of

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## Parties

- **Judges:** Anu Jagmoha…; KISHORE VEMULAPALL…
- **Appellants:** State Bank of…
- **Respondents:** Aditya Vidyut…; Narayan Pundlik…
- **Advocates:** Aniket…

## Timeline

- **2008-01-01 — Sanction of Credit…**: Aditya Vidyut Appliances Limited was…
- **2017-01-01 — Renewal of Credit…**: The credit facilities sanctioned to Aditya Vidyut Appliances Limited were subsequently…

## 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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