# In the matter of State Bank of India Vs. P V Bhaskara Rao, CP (IB) 52/95/AMR/2022

> NCLT judgment dated 2022-12-22. Citation: TCN-2022-NCLT-00053. The case involves a company petition filed by State Bank of India (SBI), the Financial Creditor…

- **Court:** NCLT
- **Order date:** 22 Dec 2022
- **Citation:** TCN-2022-NCLT-00053
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-p-v-bhaskara-rao-cp-1b551cad

## Summary

### Background

The case involves a company petition filed by State Bank of India (SBI), the Financial Creditor (FC), under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Process for Personal Guarantors to Corporate Debtors) Rules, 2019, seeking to initiate the Insolvency Resolution Process against Mr. P.V. Prabhakar Rao, the Personal Guarantor of the Corporate Debtor (CD), Prathyusha Resources & Infra Private Limited. The CD had availed working capital facilities from SBI, and Mr. Rao had provided a guarantee. When the CD defaulted, SBI initiated proceedings against the personal guarantor.

## Facts

Prathyusha Resources & Infra Private Limited (Corporate Debtor) availed working capital facilities of Rs. 50 Crores from State Bank of India (Financial Creditor) vide sanction letter dated 18.03.2011. An agreement of loan was executed on 24.03.2011. Mr. P.V. Prabhakar Rao (Respondent) stood as guarantor for the credit facilities to the extent of Rs. 50 Crores and executed a deed of guarantee on 24.03.2011. The Financial Creditor enhanced the working capital facilities and renewed the cash credit limit to Rs. 70 Crores vide sanction letter dated 03.02.2012. A supplemental agreement of loan was dated 15.02.2012. A revival letter was executed on 07.01.2014 by both the Corporate Debtor and the Respondent. The account was declared NPA on 28.06.2016. The Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the application against the …

**Ratio:** The limitation period for initiating proceedings under the IBC is governed by the

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**Reasoning:** The court reasoned that the revival letter dated 21.12.2016 amounts to an acknowledgment

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**Interpretation:** The court interpreted Section 18 of the Limitation Act to apply to proceedings

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**Application:** The court applied the principle that the OTS proposal, to which the Personal

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** State Bank of…
- **Respondents:** Prathyusha…; Mr.P.V.Prabhakar…

## Timeline

- **2011-03-18 — Sanction…**: State Bank of India issued a sanction letter for working capital facilities of Rs. 50…
- **2011-03-24 — Agreement of Loan and…**: An agreement of loan was executed, and Mr. P.V. Prabhakar Rao executed a deed of…

## 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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