# In the matter of State Bank of India vs. Nikunj Bothra

> NCLT judgment dated 2025-01-07. Citation: TCN-2025-NCLT-00669. The case involves an application filed by State Bank of India (SBI), the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 7 Jan 2025
- **Citation:** TCN-2025-NCLT-00669
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-nikunj-bothra-b9261eda

## Summary

### Background

The case involves an application filed by State Bank of India (SBI), the Financial Creditor, under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Nikunj Bothra, the Personal Guarantor, for the Corporate Debtor, Salasar Ispat Limited (SIL). SBI had sanctioned various credit facilities to SIL, which later became irregular and classified as Non-Performing Asset (NPA). SBI initiated recovery proceedings under SARFAESI Act, 2002, and filed an Original Application (O.A) before the Debt Recovery Tribunal-I, Kolkata. The Resolution Professional (RP) recommended the admission of the personal guarantor into the Insolvency Resolution Process.

## Facts

State Bank of India (SBI) sanctioned credit facilities to Salasar Ispat Limited (SIL) on 08.06.2010, including Term Loan, Working Capital, SLC, and LC (inlands) for an aggregate limit of Rs.2,650.00 Lakhs. These facilities were renewed and enhanced on several occasions, reaching Rs. 5,821.00 Lakhs by 25.03.2013. Nikunj Bothra, along with other Personal Guarantors, executed a Deed of Guarantee in favor of SBI on 25.03.2013, guaranteeing repayment of Rs.5821 Lakhs with interest. Due to irregularities in loan repayments, the account was classified as NPA on 27.06.2013. SBI initiated SARFAESI proceedings and issued a notice on 15.12.2014, demanding Rs. 60,06,44,562.27/-. A demand notice was also issued on 18.12.2014 for Rs.72,11,75,171.27. SBI filed an Original Application

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## Issues and analysis

### Issue 1: Whether proceedings against Personal Guarantor under Section 95 of the Code is maintainable even …

**Ratio:** The liability of the personal guarantor is co-extensive with that of the principal

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**Reasoning:** The court relied on the Madras High Court's decision in Rohit Nath I (Supra), which held

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**Interpretation:** Section 60 of the IBC is interpreted to mean that the NCLT has jurisdiction

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**Application:** In this case, since no CIRP was ever initiated against the Principal Borrower

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** State Bank of…
- **Respondents:** Salasar Ispat…; Nikunj B…

## Timeline

- **2010-06-08 — Credit Facilities…**: State Bank of India sanctioned various…
- **2013-03-25 — Deed of Guarantee…**: Nikunj Bothra, along with other Personal Guarantors, executed a Deed of Guarantee in…

## 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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