# In the matter of State Bank of India vs. Shri Ghanshyam Surajbali Kurmi

> NCLT judgment dated 2022-07-07. Citation: TCN-2022-NCLT-01829. The case involves a petition filed by State Bank of India (SBI), the Financial Creditor, under…

- **Court:** NCLT
- **Order date:** 7 Jul 2022
- **Citation:** TCN-2022-NCLT-01829
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-shri-ghanshyam-surajbali-kurmi-63b4fe02

## Summary

### Background

The case involves a petition filed by State Bank of India (SBI), the Financial Creditor, under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 7(2) of the Insolvency & Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019, seeking initiation of the Insolvency Resolution Process (IRP) against Shri. Ghanshyam Surajbali Kurmi, the Personal Guarantor of Apex Drugs Limited, the Corporate Debtor. The Corporate Debtor had availed credit facilities from SBI amounting to Rs. 208,21,65,555.24 Crores but failed to adhere to sanction terms, leading to its accounts being classified as Non-Performing Asset (NPA) on 30.06.2013. SBI issued a demand notice on

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## Facts

State Bank of India (SBI) extended credit facilities to Apex Drugs Limited, amounting to Rs. 208,21,65,555.24 Crores. Apex Drugs Limited defaulted on its repayment obligations, leading to its accounts being classified as Non-Performing Asset (NPA) on 30.06.2013. SBI initiated recovery proceedings under the SARFAESI Act, 2002, and before the Debt Recovery Tribunal-II, Hyderabad. An operational creditor also initiated Corporate Insolvency Resolution Process (CIRP) against Apex Drugs Limited, which was admitted on 06.09.2018. Shri. Ghanshyam Surajbali Kurmi acted as the Personal Guarantor for the credit facilities extended to Apex Drugs Limited. SBI issued a demand notice to Shri. Kurmi on 16.08.2021, demanding payment of the outstanding amount. SBI filed a petition under

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## Issues and analysis

### Issue 1: Whether the Clause-F of the approved Resolution Plan bars the Financial Creditor to initiate …

**Ratio:** The liability of a personal guarantor is co-extensive with that of the principal

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**Reasoning:** The Adjudicating Authority relied on several judgments, including Lalit Kumar Jain v.

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**Interpretation:** Clause F of the Resolution Plan, which states that once the consideration is

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**Application:** In this case, the Adjudicating Authority found that Clause F of the Resolution

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## Parties

- **Judges:** Venkata Ramakrishn…; Veera Brahma Rao…
- **Appellants:** State Bank of…
- **Respondents:** Apex Drugs…; Ghanshyam…

## Timeline

- **2013-06-30 — NPA Classif…**: Accounts of the Corporate Debtor were…
- **2014-04-25 — Demand N…**: Financial Creditor sent a Demand Notice…

## 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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