# In the matter of State Bank of India Vs. Ramesh Kumar Agarwal

> NCLT judgment dated 2022-02-11. Citation: TCN-2022-NCLT-04182. The case involves a petition filed by State Bank of India (SBI) under Section 95(1) of the…

- **Court:** NCLT
- **Order date:** 11 Feb 2022
- **Citation:** TCN-2022-NCLT-04182
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-ramesh-kumar-agarwal-1d127535

## Summary

### Background

The case involves a petition filed by State Bank of India (SBI) under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, against Ramesh Kumar Agarwal, a personal guarantor to M/s. Rythem Overseas Trade Limited (ROTL). ROTL had received various credit facilities from SBI, but defaulted on repayments, leading to its classification as a non-performing asset (NPA). SBI initiated recovery proceedings, including issuing demand notices under the SARFAESI Act and filing an application before the Debt Recovery Tribunal. ROTL was admitted into Corporate Insolvency Resolution Process (CIRP) and is now under liquidation.

## Facts

State Bank of India (SBI) filed a petition against Ramesh Kumar Agarwal, a personal guarantor of M/s. Rythem Overseas Trade Limited (ROTL), under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016. ROTL, a corporate debtor, had received credit facilities from SBI, but defaulted on repayments. SBI classified ROTL's account as a non-performing asset (NPA) on 15.12.2013. SBI issued demand notices under Section 13(2) and 13(4) of the SARFAESI Act. ROTL was admitted into CIRP and is now under liquidation since 18.02.2022. Ramesh Kumar Agarwal had executed personal guarantees in favor of SBI to secure ROTL's debts. SBI issued a demand notice to Agarwal on 06.07.2021, but received no response. The application seeks to initiate the insolvency resolution process

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## Issues and analysis

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

**Ratio:** Section 95(1) of the IBC allows a creditor to initiate insolvency resolution process

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**Reasoning:** The court considered the factual matrix, including the execution of personal guarantees

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**Interpretation:** Section 95(1) of the IBC is interpreted to provide a mechanism for creditors to

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**Application:** Given that Ramesh Kumar Agarwal executed personal guarantees for ROTL's debts,

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** State Bank of…
- **Respondents:** Rythem Overseas…; Ramesh Kumar…

## Timeline

- **2013-12-15 — Account Classified as…**: State Bank of India classified the account of Rythem Overseas Trade Limited (ROTL) as a…
- **2021-01-06 — CIRP Admi…**: ROTL was admitted into Corporate Insolvency Resolution Process (CIRP) by the National…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 95(1) — Application by creditor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-95)

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