# In the matter of State Bank of India Vs. Satheesh Babu V K, CP (IBC)/17/KOB/2022

> NCLT judgment dated 2022-03-21. Citation: TCN-2022-NCLT-03651. The case involves multiple petitions (CP(IBC)/15/KOB/2022, CP(IBC)/16/KOB/2022,…

- **Court:** NCLT
- **Order date:** 21 Mar 2022
- **Citation:** TCN-2022-NCLT-03651
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-satheesh-babu-v-k-cp-f0640806

## Summary

### Background

The case involves multiple petitions (CP(IBC)/15/KOB/2022, CP(IBC)/16/KOB/2022, CP(IBC)/17/KOB/2022, CP(IBC)/18/KOB/2022, CP(IBC)/19/KOB/2022) filed by State Bank of India 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 personal guarantors of the Corporate Debtor, M/s. Propyl Packaging Limited. The Corporate Insolvency Resolution Process (CIRP) had already been initiated against the Corporate Debtor, followed by a liquidation order due to the absence of a resolution plan.

## Facts

State Bank of India (SBI) sanctioned credit facilities to M/s. Propyl Packaging Limited, including an overdraft facility of Rs 7.05 Crore and an International Letter of Credit Facility of Rs.4.70 Crore. These facilities were secured by a mortgage of properties under SBI asset-backed loan and a letter of arrangement dated 28.11.2014. The Corporate Debtor executed a loan cum hypothecation agreement dated 05.12.2014 and a demand promissory note dated 05.12.2014. The credit facilities were enhanced to 16.80 Crore by a letter of arrangement dated 07.01.2017. The Corporate Debtor defaulted in the loan account, leading to the account being declared as NPA on 09.09.2018. SBI issued a notice under Section 13(2) of the SARFEASI Act on 05.11.2018 against the Corporate Debtor and

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## Issues and analysis

### Issue 1: Whether the applications filed under Section 95 of the Insolvency and Bankruptcy Code, 2016, read …

**Ratio:** Section 95 of the Insolvency and Bankruptcy Code, 2016, allows a creditor to apply for

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**Reasoning:** The court considered the provisions of Section 95 of the IBC and Rule 7(2) of the Rules,

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**Interpretation:** Section 95 of the IBC provides a mechanism for creditors to initiate insolvency

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**Application:** In this case, the petitioners, State Bank of India, filed applications under

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## Parties

- **Judges:** Ashok Kumar…; Anil Ku…
- **Appellants:** State Bank of…
- **Respondents:** M/s Propyl…; Mr.Rajes…
- **Advocates:** Shri. Vin…; Reeth…

## Timeline

- **2020-02-14 — CIRP Init…**: Corporate Insolvency Resolution Process…
- **2021-11-18 — Liquidation…**: Order of liquidation passed as no…

## 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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