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

> NCLT judgment dated 2022-08-04. Citation: TCN-2022-NCLT-01458. State Bank of India filed a petition under Section 95 of the Insolvency and Bankruptcy Code…

- **Court:** NCLT
- **Order date:** 4 Aug 2022
- **Citation:** TCN-2022-NCLT-01458
- **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-a76deb7e

## Summary

### Background

State Bank of India filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, against Mr. P.V. Prabhakar Rao, the Personal Guarantor of Pratuysha Resources & Infra Private Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor had availed working capital facilities from the Petitioner/Financial Creditor, with an initial agreement for Rs.50 Crores on 24.03.2011, later enhanced to Rs.70 Crores on 03.02.2012. The Respondent stood as a Personal Guarantor and executed a Supplement Deed of Guarantee dated 15.02.2012. Despite reminders, the Corporate Debtor failed to repay the outstanding debt. An Original Appeal was filed before the Debt Recovery Tribunal – I, Chennai, on 15.12.2017, which is pending.

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## Facts

State Bank of India (SBI) filed a petition against Mr. P.V. Prabhakar Rao, who is the personal guarantor for Pratuysha Resources & Infra Private Limited. The petition was filed under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the personal guarantor. Pratuysha Resources & Infra Private Limited had availed working capital facilities from SBI. An 'Agreement of Loan for Overall Limit' was executed on March 24, 2011, for Rs. 50 Crores. The working capital facilities were enhanced, and the cash credit limit was renewed to Rs. 70 Crores on February 3, 2012. A Supplement Agreement of Loan for Increase in overall limit was executed on February 15, 2012. Mr. P.V. Prabhakar

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## Issues and analysis

### Issue 1: Whether the application under Section 95 of the …

**Ratio:** The Tribunal is of the considered opinion that there is no hurdle to entertain this

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**Reasoning:** The court considered the facts presented and determined that the application met the

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**Interpretation:** Section 95 of the IBC outlines the requirements for initiating insolvency

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**Application:** Based on the facts presented, the Tribunal found that the application filed by

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## Parties

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

## Timeline

- **2011-03-24 — Agreement o…**: Agreement of Loan for Overall…
- **2012-02-03 — Cash Credit Limit…**: Cash credit limit…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95 — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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