# In the matter of State Bank of India Vs. Nathu K Patel, CP (IB)/143/CHE/2021

> NCLT judgment dated 2022-07-15. Citation: TCN-2022-NCLT-01705. This is an application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 by…

- **Court:** NCLT
- **Order date:** 15 Jul 2022
- **Citation:** TCN-2022-NCLT-01705
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-nathu-k-patel-cp-ad098399

## Summary

### Background

This is an application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 by State Bank of India, the financial creditor, against Mr. Nathu K Patel, the personal guarantor to M/s. Prabhat Resources Limited (formerly M/s. Shinago Infrastructure & Resources Limited), the corporate debtor. The corporate debtor was ordered to be liquidated by the Tribunal on 23.02.2021. The guarantee agreement was executed on 27.03.2014. The date of default is 19.02.2016, and the personal guarantee was invoked on 23.09.2020.

## Facts

State Bank of India (SBI) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016 against Mr. Nathu K Patel, who is the personal guarantor for M/s. Prabhat Resources Limited (formerly M/s. Shinago Infrastructure & Resources Limited). Prabhat Resources Limited, the corporate debtor, had received credit facilities from SBI under a Working Capital Consortium Agreement. The corporate debtor was ordered to be liquidated on 23.02.2021. The guarantee agreement was executed on 27.03.2014. The date of default is 19.02.2016, and the personal guarantee was invoked on 23.09.2020. The application is to initiate proceedings against the personal guarantor under Section 95(1) of the IBC. SBI relies on the Recovery Certificate and the admission of

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India under Section 95(1) of the Insolvency and …

**Ratio:** Section 95(1) of the Insolvency and Bankruptcy Code, 2016 allows a creditor to file an

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**Reasoning:** The Adjudicating Authority considered the application based on the provisions of Section

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**Interpretation:** Section 95(1) provides a mechanism for creditors to initiate insolvency

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**Application:** The application was filed by State Bank of India, a financial creditor, against

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## Parties

- **Judges:** (Retd.) S.…; SAMEER…
- **Appellants:** State Bank of…
- **Respondents:** Prabhat Resources…; NATHU K…

## Timeline

- **2014-03-27 — Guarantee Ag…**: Guarantee Agreement executed between State…
- **2016-02-19 — Date of D…**: Date of default by the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95(1) — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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