# In the matter of State Bank of India Vs. Nazar S, CP (IB)/05/KOB/2022

> NCLT judgment dated 2022-03-11. Citation: TCN-2022-NCLT-03796. The case involves applications filed under Section 95(1) of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 11 Mar 2022
- **Citation:** TCN-2022-NCLT-03796
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-nazar-s-cp-62edea4f

## Summary

### Background

The case involves applications filed under Section 95(1) 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, by State Bank of India against Mrs. Raheena and Mr. Nazar. S, who are personal guarantors to the corporate debtor, M/s. Nassco Trading India Private Limited. The State Bank of Travancore (later merged with State Bank of India) had granted credit facilities to the corporate debtor, which were enhanced over time. The corporate debtor defaulted, leading to its account being classified as NPA. The creditor issued a loan recall notice and initiated proceedings under the SARFAESI Act.

## Facts

State Bank of India filed applications under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against Mrs. Raheena and Mr. Nazar. S, personal guarantors to M/s. Nassco Trading India Private Limited. The State Bank of Travancore (SBT) initially granted credit facilities of Rs. 2,00,00,000 to the Corporate Debtor on 02.09.2011. The credit facility was enhanced over time, reaching 9.5 Crore with an additional term loan of Rs. 1 Crore on 18.02.2016. The personal guarantors executed deeds of guarantee between 2011 and 2016. SBT merged with State Bank of India (SBI) on 01.04.2017. The Corporate Debtor's loan accounts became NPA on 28.08.2017. A loan recall notice was issued on 16.01.2018, demanding Rs. 11,25,61,907.81 within 7 days. The Corporate Debtor and

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## Issues and analysis

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

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016, allows a creditor to initiate an

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**Reasoning:** The Tribunal considered the provisions of Section 95 of the I&B Code, 2016, and the

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

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**Application:** The Tribunal found that the applications were filed under Section 95 of the

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## Parties

- **Judges:** Ashok Kumar…; Anil Ku…
- **Appellants:** State Bank of…
- **Respondents:** Nassco Trading…; Rahe…

## Timeline

- **2011-09-02 — Initial Credit…**: State Bank of Travancore granted credit facilities of Rs. 2,00,00,000 to the Corporate…
- **2016-02-18 — Enhanced Credit…**: Cash credit facility was enhanced to 9.5 Crore, and an additional term loan of Rs. 1…

## 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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