# In the matter of State Bank of India vs. Neeta Jain

> NCLT judgment dated 2024-08-30. Citation: TCN-2024-NCLT-00708. The case involves an application filed by State Bank of India (SBI) under Section 95 of the…

- **Court:** NCLT
- **Order date:** 30 Aug 2024
- **Citation:** TCN-2024-NCLT-00708
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-neeta-jain-59fd8edd

## 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 Neeta Jain, a personal guarantor to the loans availed by the Corporate Debtor, M/s. Kanishk Gold Private Limited. The application seeks to initiate the insolvency resolution process against the personal guarantor due to a default on the principal amount of INR 359,95,77,333.94 as of 15.09.2020. The date of default was specified as 12.09.2017. The Corporate Debtor's loan account slipped into NPA on 28.07.2017. SBI had also filed OA No. 347 of 2018 before DRT-II Chennai for recovery of dues from the Corporate Debtor and its Guarantors, which is pending consideration. An earlier application under Section 7 of IBC, 2016, against

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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 Neeta Jain, who is a personal guarantor for loans availed by M/s. Kanishk Gold Private Limited (the Corporate Debtor). The Corporate Debtor had approached a consortium of banks, including SBI, for financial assistance. Neeta Jain and her husband, Mr. Bhoopesh Kumar Jain, who are directors of the Corporate Debtor, also stood as guarantors for the loan. The Corporate Debtor defaulted on a principal amount of INR 359,95,77,333.94 as of 15.09.2020, with the date of default being 12.09.2017, and the account slipping into NPA on 28.07.2017. SBI had previously filed OA No. 347 of 2018 before DRT-II Chennai for recovery of dues, which is still pending. An

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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 128 of the Indian Contract Act, 1872, provides that the liability of the surety

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**Reasoning:** The court considered the date of default (28.07.2017) and the date of application

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**Interpretation:** The interpretation of Section 128 of the Indian Contract Act, 1872, establishes

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**Application:** The ratio and reasoning were applied to the specific facts of the case,

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Kanishk Gold…; Neeta…
- **Advocates:** Sashik…; M.L. Ga…

## Timeline

- **2017-07-28 — Loan Account Classified…**: The loan account of the Corporate Debtor was…
- **2017-09-12 — Demand Notice…**: The Financial Creditor issued a demand notice under Section 13(2) of the SARFAESI Act to…

## 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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