# 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-00064. 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-00064
- **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-a0d51805

## 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 the Respondent stood as guarantor. The FC filed the petition as the Personal Guarantor did not discharge the debt despite a demand notice. The CD's Corporate Insolvency Resolution

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## Facts

The Corporate Debtor (CD), Prathyusha Resources & Infra Private Limited, availed working capital facilities of Rs. 50 Crores from State Bank of India (SBI), the Financial Creditor (FC), vide sanction letter dated 18.03.2011. An agreement of loan was executed on 24.03.2011. Mr. P.V. Prabhakar Rao, the Respondent, stood as guarantor for the credit facilities to an extent of Rs. 50 Crores and executed a deed of guarantee on 24.03.2011. The guarantee was a continuing guarantee. The FC 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 CD and the Respondent. A restructuring sanction

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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 amounted to an acknowledgment

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**Interpretation:** The interpretation of Section 18 of the Limitation Act is crucial in

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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…**: Working capital facilities of Rs. 50…
- **2011-03-24 — Agreement of Loan and…**: Agreement of Loan executed, and…

## 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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