# In the matter of State Bank of India Vs. Shivgan K Patel, CP (IB)/167/CHE/2021

> NCLT judgment dated 2022-07-15. Citation: TCN-2022-NCLT-01690. The case pertains to an application filed by State Bank of India (SBI) under Section 95(1) of…

- **Court:** NCLT
- **Order date:** 15 Jul 2022
- **Citation:** TCN-2022-NCLT-01690
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-shivgan-k-patel-cp-d4d735c9

## Summary

### Background

The case pertains to an application filed by State Bank of India (SBI) under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, against Mr. Shivgan K Patel, a personal guarantor to M/s. Prabhat Resources Limited. SBI, the financial creditor, seeks to initiate insolvency proceedings against the personal guarantor due to defaults in credit facilities extended to the corporate debtor. The corporate debtor was ordered to be liquidated on 23.02.2021. The guarantee agreement was executed on 27.03.2014, the date of default was 19.02.2016, and the personal guarantee was invoked on 23.09.2020.

## Facts

State Bank of India (SBI) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, against Mr. Shivgan K Patel, who is a personal guarantor for M/s. Prabhat Resources Limited. Prabhat Resources Limited, formerly known as M/s. Shinago Infrastructure & Resources Limited, received credit facilities under a Working Capital Consortium Agreement from SBI. The Corporate Debtor was ordered to be liquidated on 23.02.2021. The guarantee agreement was executed on 27.03.2014. The date of default was 19.02.2016, and the personal guarantee was invoked on 23.09.2020 through a Demand Notice in Form B. SBI claims the application is within the limitation period, relying on the Recovery Certificate and the admission of the Corporate Insolvency

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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 Insolvency and Bankruptcy Code, 2016, allows a creditor to file an

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**Reasoning:** The court considered the observations of the Hon'ble NCLAT, which stated that once an

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**Interpretation:** Section 95(1) provides the legal basis for initiating insolvency proceedings

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**Application:** The court applied Section 95(1) and the NCLAT's guidelines to the present case,

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## Parties

- **Judges:** (Retd.) S.…; SAMEER…
- **Appellants:** State Bank of…
- **Respondents:** Prabhat Resources…; Shivgan K…

## Timeline

- **2014-03-27 — Guarantee Agreement…**: The Guarantee Agreement was…
- **2016-02-19 — Date of D…**: The date of default as stated in…

## 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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