# In the matter of State Bank of India Vs. Nawal Kishore Saxena, CP (IB)/745(PB)/2021

> NCLT judgment dated 2022-07-05. Citation: TCN-2022-NCLT-01872. 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-01872
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-nawal-kishore-saxena-cp-699e288b

## 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 Mr. Nawal Kishore Saxena, the personal guarantor to the corporate debtor, M/s Zillion Infraprojects Pvt. Ltd. The corporate debtor had availed credit facilities from the applicant bank, and Mr. Saxena had provided a personal guarantee for these facilities. The corporate debtor defaulted on its payments, leading to its account being classified as Non-Performing Asset (NPA). The bank invoked the guarantee and issued a demand notice to Mr. Saxena. The application was filed after the expiry of 14 days from the receipt of the demand notice.

## Facts

State Bank of India (SBI) sanctioned financial assistance of Rs. 17 crores to Zillion Infraprojects Pvt. Ltd. on 2006-08-23. This was later enhanced to Rs. 100 crores on 2017-03-15. Loan and security documents were executed on 2017-04-25, and a deed of guarantee was executed by Mr. Nawal Kishore Saxena, the personal guarantor. Zillion Infraprojects defaulted, and the account was classified as NPA. SBI issued a demand notice on 2018-06-14 for Rs. 44.88 crores, but the borrowers failed to pay. An application under Section 7 of the IBC was filed by L&T Finance Limited against Zillion Infraprojects, which was admitted on 2019-02-05. SBI invoked the guarantee on 2021-09-09. Mr. Saxena responded on 2021-09-28, claiming lack of privity of contract and that the demand

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## Issues and analysis

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

**Ratio:** Section 95 of the IBC allows a creditor to initiate insolvency resolution process against

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**Reasoning:** The Adjudicating Authority considered the submissions and the report of the Resolution

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**Interpretation:** Section 95 provides a mechanism for creditors to pursue insolvency proceedings

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**Application:** The application was filed by SBI against Mr. Saxena, the personal guarantor to

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## Parties

- **Judges:** Ramalingam…; Sh. Avinash Kumar…
- **Appellants:** State Bank of…
- **Respondents:** Zillion Infraproje…; Sh. Nawal Kishore…

## Timeline

- **2006-08-23 — First San…**: 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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