# In the matter of State Bank of India Vs. P V Mohan Rao, CP (IB) 30/95/AMR/2022

> NCLT judgment dated 2022-12-22. Citation: TCN-2022-NCLT-00073. The State Bank of India, as the Financial Creditor (FC), filed a Company Petition under Section…

- **Court:** NCLT
- **Order date:** 22 Dec 2022
- **Citation:** TCN-2022-NCLT-00073
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-p-v-mohan-rao-cp-1cb8983f

## Summary

### Background

The State Bank of India, as the Financial Creditor (FC), filed a Company Petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against Mr. P.V. Mohan Rao, the Personal Guarantor of the Corporate Debtor (CD), M/s. Prathyusha Resources & Infra Private Limited. The CD had availed working capital facilities from the FC, with the Respondent acting as guarantor. The FC claimed default occurred on 29.06.2019 after an OTS was cancelled. The Personal Guarantor did not discharge the debt despite a demand notice. The FC initiated CIRP against the CD, which was admitted by the Tribunal. The Personal Guarantor contended that the cause of action was barred by time and that an OTS granted to the CD

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## Facts

State Bank of India (SBI), the Financial Creditor (FC), extended working capital facilities to M/s. Prathyusha Resources & Infra Private Limited, the Corporate Debtor (CD). Mr. P.V. Mohan Rao acted as the Personal Guarantor for these facilities, guaranteeing up to Rs. 50 Crores. The CD availed these facilities under a sanction letter dated 18.03.2011, and the FC executed an Agreement of Loan on 24.03.2011. The Respondent executed a deed of guarantee on 24.03.2011. The FC enhanced the working capital facilities and renewed the cash credit limit to Rs. 70 Crores via a sanction letter dated 03.02.2012. A Supplemental Agreement of Loan was executed on 15.02.2012. The account was declared NPA on 28.06.2016. The CD requested a settlement under compromise on 26.09.2018,

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## Issues and analysis

### Issue 1: Whether the Company Petition filed by the …

**Ratio:** Section 18 of the Limitation Act stipulates that a fresh period of limitation shall be

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**Reasoning:** The Tribunal reasoned that the limitation period would be three years from the date of

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**Interpretation:** Section 18 of the Limitation Act is applicable to proceedings under the IBC.

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**Application:** Since the Company Petition was filed after the expiry of the limitation period

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## Parties

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

## Timeline

- **2011-03-18 — Sanction…**: The Corporate Debtor availed working capital facilities of Rs.50 Crores vide sanction…
- **2011-03-24 — Agreement of Loan and…**: The Financial Creditor executed the Agreement of Loan for Overall Limit with the…

## 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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