# In the matter of State Bank of India Vs. P V Prabhakar Rao, CP (IB) 29/95/AMR/2022

> NCLT judgment dated 2022-12-22. Citation: TCN-2022-NCLT-00060. The Financial Creditor (State Bank of India) filed a Company Petition under Section 95(1) of…

- **Court:** NCLT
- **Order date:** 22 Dec 2022
- **Citation:** TCN-2022-NCLT-00060
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-p-v-prabhakar-rao-cp-0a512557

## Summary

### Background

The Financial Creditor (State Bank of India) filed a Company Petition under Section 95(1) of the Insolvency and Bankruptcy Code, 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 the Personal Guarantor of the Corporate Debtor (Pratuyusha Resources & Infra Private Limited). The Corporate Debtor had availed working capital facilities from the Financial Creditor, and the Respondent stood as guarantor. The Financial Creditor filed the application as the Personal Guarantor did not discharge the debt despite a demand notice. The Corporate Insolvency Resolution Process (CIRP) against

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## Facts

State Bank of India, the Financial Creditor (FC), filed a company petition against Mr. P.V. Bhaskara Rao, the Personal Guarantor (Respondent), of Pratuysha Resources & Infra Private Limited, the Corporate Debtor (CD). The CD availed working capital facilities of Rs. 50 Crores from the FC, sanctioned on 2011-03-18, and executed an Agreement of Loan on 2011-03-24. The Respondent stood as guarantor for these facilities, executing a deed of guarantee on 2011-03-24. The guarantee was a continuing guarantee. The FC enhanced the working capital facilities to Rs. 70 Crores on 2012-02-03. A Supplemental Agreement of Loan and Deed of Guarantee were executed on 2012-02-15. A revival letter was executed on 2014-01-07, and a restructuring sanction letter was signed on

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## Issues and analysis

### Issue 1: Whether the Company Petition …

**Ratio:** The limitation period for initiating CIRP is three years from the date of default or

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**Reasoning:** The court reasoned that the last acknowledgment of debt was the revival letter dated

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**Interpretation:** Section 18 of the Limitation Act allows for the extension of the limitation

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**Application:** The court found that the OTS proposal, to which the Personal Guarantor was not

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## Parties

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

## 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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