# In the matter of State Bank of India vs. Rajendra Prasad Mahshwariari, {IA (IBC) No. 14/JPR/2024 in CP No. (IB) 81/95/JPR/2022]

> NCLT judgment dated 2024-08-13. Citation: TCN-2024-NCLT-00811. The case pertains to an application filed by the Resolution Professional, Mr. Satyendra P.…

- **Court:** NCLT
- **Order date:** 13 Aug 2024
- **Citation:** TCN-2024-NCLT-00811
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-rajendra-prasad-mahshwariari-ia-4944faf7

## Summary

### Background

The case pertains to an application filed by the Resolution Professional, Mr. Satyendra P. Khorania, under Section 99(1) read with Section 99(7) of the Insolvency and Bankruptcy Code, 2016 (IBC), recommending the admission of an application filed by State Bank of India (SBI), the Creditor, under Section 95 of the Code. SBI sought the commencement of the Insolvency Resolution Process (IRP) against the Personal Guarantor, Mr. Rajendra Prasad Maheshwari, of M/s Suzuki Textiles Limited, the Corporate Debtor. The creditor had filed the main application under Section 95 of the Code read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019, seeking

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## Facts

The State Bank of India (SBI), acting as the lead bank of a consortium, extended credit facilities to Suzuki Textiles Limited ('Corporate Debtor'). These facilities became irregular, leading to the classification of the debts as non-performing assets (NPA). SBI initiated proceedings under Section 95 of the Insolvency and Bankruptcy Code (IBC) against Mr. Rajendra Prasad Maheshwari ('Personal Guarantor'), who had provided a personal guarantee for the Corporate Debtor's debts. The creditor filed the main application under Section 95 of the Code read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019, seeking initiation of IRP against the Personal

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor in the matter of Personal Guarantor falls …

**Ratio:** Section 95 of the IBC allows a creditor to initiate insolvency proceedings against a

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**Reasoning:** The court considered that various Financial Creditors have demanded the amount of

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**Interpretation:** Section 95 is interpreted to mean that if a personal guarantor defaults on

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**Application:** The court applied this to the fact that Mr. Rajendra Prasad Maheshwari had

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## Parties

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

## Timeline

- **2023-11-30 — Appointment of…**: Adjudicating Authority appointed Mr. Satyendra Prasad Khorania as the Resolution…
- **2019-07-30 — Demand Notice under…**: State Bank of India (Lead Bank of the Consortium) on behalf of Consortium had issued a…

## 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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