# In the matter of State Bank of India Vs. Sahadulla M I & Ors, IBA/42,43,44 & 45/KOB/2020

> NCLT judgment dated 2022-06-10. Citation: TCN-2022-NCLT-02291. The State Bank of India filed applications under Section 95(1) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 10 Jun 2022
- **Citation:** TCN-2022-NCLT-02291
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-sahadulla-m-i-ors-iba424344-45kob2020-af8eb189

## Summary

### Background

The State Bank of India filed applications under Section 95(1) of the Insolvency and Bankruptcy Code, 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, against Sahadulla M.I, Zaheer E.N, E.lqbal, and E.M Najeeb, who are personal guarantors of Green Gateway Leisure Private Limited. Green Gateway Leisure Private Limited had availed credit facilities from the applicant, State Bank of India, amounting to Rs. 72,63,09,421/-. The Corporate Insolvency Resolution Process (CIRP) was initiated against Green Gateway Leisure Private Limited vide order dated 15.10.2020 under Section 7 of the I&B Code, 2016 by the Union Bank of India.

## Facts

The State Bank of India (SBI) extended credit facilities to Green Gateway Leisure Private Limited for the development of a five-star hotel in Bekal, Kasaragod. The land for the project was acquired by Bekal Resorts Development Corporation Limited (BRDC) and leased to Green Gateway. SBI sanctioned credit facilities totaling Rs. 67,64,050 on 14.01.2010, a term loan of 20 crores on 24.02.2010, another term loan of 20 crores on 20.05.2010 and 8 crore on 09.02.2015 amounting to a total of Rs. 48.67 crore. The credit facilities were secured by a pari passu first charge on the corporate debtor's fixed assets, personal guarantees from Sahadulla M.I, Zaheer E.N, E.lqbal, and E.M Najeeb, and a corporate guarantee from Air Travel Enterprises India Limited. Due to defaults in

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## Issues and analysis

### Issue 1: Whether the applications filed by the State Bank of India against the personal guarantors of Green …

**Ratio:** Section 95(1) of the Insolvency and Bankruptcy Code, 2016 allows a creditor to initiate

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**Reasoning:** The Tribunal considered the fact that the Corporate Debtor had defaulted in its debt

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**Interpretation:** Section 95(1) provides a mechanism for creditors to recover their dues from

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**Application:** The Tribunal applied Section 95(1) to the facts of the case, noting that the

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## Parties

- **Judges:** Ashok Kumar…; Anil Ku…
- **Appellants:** State Bank of…
- **Respondents:** Green Gateway…; Sahadull…

## Timeline

- **2010-01-14 — Credit Facility…**: State Bank of India sanctioned credit facilities to Green Gateway Leisure Private Limited…
- **2010-02-24 — Term Loan San…**: State Bank of India sanctioned a term loan of 20 crores to Green Gateway Leisure Private…

## 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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