# In the matter of State Bank of India vs. Sanjay Singal

> NCLT judgment dated 2024-10-07. Citation: TCN-2024-NCLT-00470. The State Bank of India (SBI) filed an application under Section 95 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 7 Oct 2024
- **Citation:** TCN-2024-NCLT-00470
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-sanjay-singal-24cd5d62

## Summary

### Background

The State Bank of India (SBI) filed an application under Section 95 of the Insolvency and Bankruptcy Code (IBC) against Ms. Sanjay Singal, a personal guarantor to the corporate debtor, M/s Bhushan Power and Steel Limited (BPSL). The application was filed due to defaults in loan facilities availed by BPSL from a consortium of banks, including SBI. The Resolution Professional (RP) submitted reports recommending the acceptance of SBI's application. Ms. Singal filed objections, raising issues of limitation, valuation of the corporate debtor, and the applicability of the Indian Contract Act. The Adjudicating Authority considered these objections and the RP's reports to determine whether to admit the application for insolvency resolution against the personal guarantor.

## Facts

1. State Bank of India (SBI) filed an application under Section 95 of the Insolvency and Bankruptcy Code (IBC) against Ms. Sanjay Singal, a personal guarantor to M/s Bhushan Power and Steel Limited (BPSL).
2. BPSL had availed loan facilities from a consortium of banks, including SBI, and Ms. Singal had provided a personal guarantee for these facilities.
3. BPSL defaulted on its loan obligations and was admitted into Corporate Insolvency Resolution Process (CIRP) on 26.07.2017.
4. SBI invoked the personal guarantee and issued a demand notice to Ms. Singal on 13.02.2018, demanding payment of INR 5492,49,73,541.91.
5. SBI served a statutory demand notice on 31.08.2020, demanding INR 12275,91,01,862.
6. Ms. Singal filed a reply on 16.11.2021, raising objections to the

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## Issues and analysis

### Issue 1: Whether the application under Section 95 …

**Ratio:** The limitation period for invoking a personal guarantee begins to run from the date of

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**Reasoning:** The Adjudicating Authority relied on the judgment in Pooja Ramesh Singh v State Bank of

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**Interpretation:** The interpretation of the guarantee deed is crucial in determining when the

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**Application:** In this case, the demand notice was issued on 13.02.2018, and the application

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## Parties

- **Judges:** Ramalingam…; SH. AVINASH KUMAR…
- **Appellants:** State Bank of…
- **Respondents:** M/s Bhushan Power…; Sanjay S…

## Timeline

- **2017-02-22 — Gazette Notif…**: Gazette Notification dated February 22, 2017 SBBJ, SBH, SBM, SBP and SBT amalgamated into…
- **2017-07-26 — CIRP Init…**: Corporate Debtor, BPSL admitted to Corporate Insolvency Resolution Process (CIRP) by this…

## 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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