# In the matter of State Bank of India Vs. Pradip Jayantilal Karia, CP (IB)/166(AHM)/2021

> NCLT judgment dated 2022-04-27. Citation: TCN-2022-NCLT-03022. This case involves an application filed by State Bank of India (SBI), the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 27 Apr 2022
- **Citation:** TCN-2022-NCLT-03022
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-pradip-jayantilal-karia-cp-a8889ac9

## Summary

### Background

This case involves an application filed by State Bank of India (SBI), the Financial Creditor, 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 Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, to initiate the Insolvency Resolution Process against Mr. Pradip Jayantilal Karia, the Personal Guarantor, due to a default amount of Rs. 176,45,58,095.31. The default includes a principal outstanding amount of Rs. 66,77,94,405.90 and accrued interest and penal interest of Rs. 109,67,63,689.41. The Personal Guarantor had provided a guarantee for the repayment of interest, cost, charges, and other expenses related to a Deed of

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## Facts

State Bank of India (SBI), the Financial Creditor, filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Insolvency Resolution Process against Mr. Pradip Jayantilal Karia, the Personal Guarantor, due to a default amount of Rs. 176,45,58,095.31. This amount includes a principal outstanding amount of Rs. 66,77,94,405.90 and accrued interest and penal interest of Rs. 109,67,63,689.41. Mr. Karia stood as a personal guarantor for Pradip Overseas Limited. SBI led Consortium issued a sanction letter on 11.05.2012 for restructuring of Funds Based Working Capital Credit. The Corporate Debtor availed further credit facilities and its Directors entered into Mortgage Deed dated 05.04.2014. A Deed of Guarantee dated 25.04.2014

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 95(1) of the IBC, 2016, to …

**Ratio:** Section 95(1) of the IBC, 2016, allows a creditor to file an application for initiating

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**Reasoning:** The Tribunal considered the averments in the application, the reply of the Respondent,

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**Interpretation:** Section 95(1) of the IBC, 2016, is interpreted to mean that a financial

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**Application:** In this case, the Financial Creditor, SBI, filed an application under Section

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## Parties

- **Judges:** Madan B.…; KAUSHALENDRA…
- **Appellants:** State Bank of…
- **Respondents:** Pradip Overseas…; Pradip Jayantilal…

## Timeline

- **2012-05-11 — Sanction…**: SBI led Consortium issued sanction letter for restructuring of Funds Based Working…
- **2014-03-22 — Security Trustee…**: PNB Investment Services Limited agreed to act as Scrutiny Trustee through Security…

## 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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