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

> NCLT judgment dated 2023-11-30. Citation: TCN-2023-NCLT-00517. State Bank of India filed an application under Section 95 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 30 Nov 2023
- **Citation:** TCN-2023-NCLT-00517
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-rajendra-prasad-maheshwari-4d0bac27

## Summary

### Background

State Bank of India filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Shri Rajendra Prasad Maheshwari, the Personal Guarantor, for loans availed by M/s Suzuki Textiles Ltd, the Corporate Debtor. The Corporate Debtor's account was declared NPA on 02.06.2017, and a notice under Section 13(2) of the SARFAESI Act, 2002, was issued on 30.07.2019. The Corporate Debtor defaulted on repayment, leading to the invocation of the personal guarantee. An operational creditor, M/s Sangam (India) Ltd., had previously filed an application under Section 9 of the Code against the Corporate Debtor, which was admitted on 31.01.2022. SBI filed its claim before the Resolution Professional, and the

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## Facts

State Bank of India (SBI) filed an application to initiate Insolvency Resolution Process against Shri Rajendra Prasad Maheshwari, who acted as the Personal Guarantor for loans availed by M/s Suzuki Textiles Ltd, the Corporate Debtor. The Corporate Debtor's account was declared a Non-Performing Asset (NPA) on 02.06.2017. SBI issued a notice under Section 13(2) of the SARFAESI Act, 2002, on 30.07.2019, demanding repayment. The Corporate Debtor and its guarantors failed to repay Rs. 62.18 Crores, leading to 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., had initiated insolvency proceedings against the Corporate Debtor under Section 9 of the IBC,

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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, provides for the initiation of

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**Reasoning:** The court observed that the application was filed by State Bank of India, the Creditor,

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**Interpretation:** Section 95 of the IBC allows creditors to initiate insolvency proceedings

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**Application:** The court applied Section 95 of the IBC to the facts of the case, noting that

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## Parties

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

## Timeline

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

## 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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