# In the matter of State Bank of India Vs. Pritesh Jayantilal Karia, CP (IB)/167(AHM)/2021

> NCLT judgment dated 2022-04-27. Citation: TCN-2022-NCLT-03030. The 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-03030
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-pritesh-jayantilal-karia-cp-a2b0bf2f

## Summary

### Background

The 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. Pritesh Jayantilal Karia, the Personal Guarantor, for 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 stood as Guarantor in respect of repayment of interest, cost, charges, and other expenses in respect of a Deed of

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## Facts

State Bank of India (SBI) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Insolvency Resolution Process against Mr. Pritesh Jayantilal Karia, the Personal Guarantor, for 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 guarantor for the repayment of interest, costs, charges, and other expenses related to a Deed of Guarantee in favor of an SBI-led consortium of banks. The Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor was initiated on 09.11.2020. SBI issued a sanction letter on 11.05.2012 for restructuring funds-based working capital

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 95 of the IBC for initiating …

**Ratio:** Section 95 of the IBC allows a creditor to initiate the insolvency resolution process

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**Reasoning:** The Adjudicating Authority considered the application filed by the Financial Creditor,

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**Interpretation:** Section 95 of the IBC provides a mechanism for creditors to recover their dues

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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…; Pritesh Jayantilal…

## Timeline

- **2012-05-11 — Sanction Lette…**: 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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