# In the matter of State Bank of India Vs. Nathella Sampath Chetty & Co, IBA/763/2020

> NCLT judgment dated 2022-06-01. Citation: TCN-2022-NCLT-02494. The case involves an application filed by State Bank of India (SBI) under Section 95 of the…

- **Court:** NCLT
- **Order date:** 1 Jun 2022
- **Citation:** TCN-2022-NCLT-02494
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-nathella-sampath-chetty-co-iba7632020-077f1284

## Summary

### Background

The case involves an application filed by State Bank of India (SBI) under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, against Nathella Sampath Chetty & Co, the personal guarantor to Nathella Sampath Jewellery Private Limited, which is undergoing Corporate Insolvency Resolution Process (CIRP). SBI sought to initiate insolvency proceedings against the personal guarantor due to defaults. The application was filed before the National Company Law Tribunal (NCLT), Division Bench II, Chennai. The respondent contended that the applicant had not served the proper demand notice under IBC and had only sent demand notice under Section 13(2) of the SARFAESI Act and it could not be considered as a notice for invocation of guarantee. The respondent also

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## Facts

State Bank of India (SBI) filed an application under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, against Nathella Sampath Chetty & Co, a partnership firm. Nathella Sampath Chetty & Co acted as a personal guarantor for Nathella Sampath Jewellery Private Limited, the Corporate Debtor, which was undergoing Corporate Insolvency Resolution Process (CIRP). The date of default was stated as 2018-02-04. Agreements of Guarantee were executed by the Personal Guarantor. SBI issued a demand notice under Section 13(2) of the SARFAESI Act to the Respondent. The Respondent contended that the Applicant had not served the proper demand notice under IBC and had only sent demand notice under Section 13(2) of the SARFAESI Act. The deeds of guarantee dated

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## Issues and analysis

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

**Ratio:** The term 'individual' as used in the definition of 'personal guarantor' under Section

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**Reasoning:** The NCLT reasoned that the combined reading of Section 60(5) and Section 5(22) of the IBC

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**Interpretation:** The interpretation of 'personal guarantor' under the IBC is restricted to

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**Application:** In this case, Nathella Sampath Chetty & Co, the Respondent, is a

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## Parties

- **Judges:** (Retd.) S.…; Anil Ku…
- **Appellants:** State Bank of…
- **Respondents:** Nathella Sampath…; Nathella Sampath…
- **Advocates:** Mr.K.Chandrasekara…; Ms.Lekha Chandrase…

## Timeline

- **2018-02-04 — Date of D…**: The date of default as stated in the…
- **2020-01-03 — Liquidation…**: An order was passed for the liquidation of Nathella Sampath Jewellery Private Limited by…

## 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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