# In the matter of State Bank of India vs. Rajendra Prasad Maheshwari

> NCLT judgment dated 2023-11-30. Citation: TCN-2023-NCLT-00513. The State Bank of India ('Creditor'/'Applicant') filed an application to initiate Insolvency…

- **Court:** NCLT
- **Order date:** 30 Nov 2023
- **Citation:** TCN-2023-NCLT-00513
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-rajendra-prasad-maheshwari-45937d24

## Summary

### Background

The State Bank of India ('Creditor'/'Applicant') filed an application to initiate Insolvency Resolution Process against Shri Rajendra Prasad Maheshwari ('Personal Guarantor'/'Respondent') under Section 95 of the Insolvency and Bankruptcy Code, 2016 ('IBC'/'Code') 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. The Personal Guarantor had provided a personal guarantee for loans availed by M/s Suzuki Textiles Ltd ('Corporate Debtor'). The corporate debtor's account was declared NPA on 02.06.2017, and the creditor issued a notice under Section 13(2) of SARFAESI Act, 2002 on 30.07.2019.

## Facts

State Bank of India filed an application to initiate Insolvency Resolution Process against Shri Rajendra Prasad Maheshwari, who acted as a personal guarantor for loans availed by M/s Suzuki Textiles Ltd. The corporate debtor's account was declared NPA on 02.06.2017, leading to a notice under Section 13(2) of SARFAESI Act, 2002, on 30.07.2019. The corporate debtor and its guarantors failed to repay a demand of Rs. 62.18 Crores, resulting in a legal notice on 28.11.2019. SBI also filed an Original Application 517/2020 before the Debt Recovery Tribunal, Jaipur. An Operational Creditor, M/s Sangam (India) Ltd., initiated insolvency proceedings against the Corporate Debtor under Section 9 of the Code, which was admitted on 31.01.2022. SBI filed a claim of Rs.

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India under Section 95 of the Insolvency and …

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the

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**Reasoning:** The court observed that the Personal Guarantor had defaulted in payment of the dues

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**Interpretation:** Section 95 allows a creditor to initiate insolvency proceedings against a

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**Application:** The court applied Section 95 and Rule 7(2) to the facts of the case, noting

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** State Bank of…
- **Respondents:** M/s Suzuki…; Rajendra Prasad…

## Timeline

- **2017-06-02 — Corporate Debtor…**: The account of the Corporate Debtor, M/s Suzuki Textiles Ltd, was declared as…
- **2019-07-30 — Notice under Section…**: The Creditor issued a notice under Section 13(2) of the SARFAESI Act, 2002, to the…

## 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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