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

> NCLT judgment dated 2022-06-24. Citation: TCN-2022-NCLT-02065. The case involves two petitions, CP(IB)/04/KOB/2022 and CP(IB)/05/KOB/2022, filed by State Bank…

- **Court:** NCLT
- **Order date:** 24 Jun 2022
- **Citation:** TCN-2022-NCLT-02065
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-nazar-s-cp-69d84f1b

## Summary

### Background

The case involves two petitions, CP(IB)/04/KOB/2022 and CP(IB)/05/KOB/2022, filed by State Bank of India 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, against the personal guarantors of M/s. Nasco Trading India Ltd. The petitions seek to initiate the Insolvency Resolution Process against the personal guarantors, Mrs. Raheena and Mr. Nazar S, due to defaults committed by the corporate debtor. The corporate debtor is already undergoing Corporate Insolvency Resolution Process. The State Bank of Travancore (now merged with State Bank of India) had granted credit facilities

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## Facts

The State Bank of India filed petitions against Mrs. Raheena and Mr. Nazar S, who are personal guarantors to the corporate debtor, M/s. Nasco Trading India Ltd. The corporate debtor is already undergoing Corporate Insolvency Resolution Process. The erstwhile State Bank of Travancore (SBT) granted credit facilities to the corporate debtor amounting to Rs.2,00,00,000/- on 02.09.2011, which was later enhanced to Rs.9.5 Crore along with a term loan of Rs.1 Crore on 18.02.2016. The personal guarantors executed deeds of guarantee and supplementary deeds of guarantee for the increase in the overall limit of credit facilities. The State Bank of Travancore merged with State Bank of India (SBI) with effect from 01.04.2017. Due to defaults by the Corporate Debtor, the loan

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## Issues and analysis

### Issue 1: Whether the applications filed by the 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 Tribunal considered the averments in the IBA and the report of the RP and was of the

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**Interpretation:** Section 95(1) provides the legal basis for creditors to initiate insolvency

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**Application:** The Tribunal applied Section 95(1) to the facts of the case, noting that the

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## Parties

- **Judges:** Ashok Kumar…; Anil Ku…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Nasco…; Rahe…

## Timeline

- **2011-09-02 — Grant of Credit…**: The erstwhile State Bank of Travancore (SBT) granted credit facilities of…
- **2016-02-18 — Enhancement of Credit…**: Cash credit facility was enhanced to Rs.9.5…

## 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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