# In the matter of State Bank of India Vs. Shri Gopal Prasad Agarwal, CP (IB) No. 12/CB/2022

> NCLT judgment dated 2022-03-04. Citation: TCN-2022-NCLT-03894. The case pertains to an application filed by State Bank of India (SBI) under Section 95(1) of…

- **Court:** NCLT
- **Order date:** 4 Mar 2022
- **Citation:** TCN-2022-NCLT-03894
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-shri-gopal-prasad-agarwal-cp-0124b350

## 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, 2016, read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019, against Mr. Gopal Parsad Agarwal, a personal guarantor to Vandana Vidhyut Limited (VVL). The application seeks to initiate the Insolvency Resolution Process against the personal guarantor. VVL had availed credit facilities from a consortium of banks, including SBI, secured by personal guarantees. VVL defaulted on its payments, leading to the application against the personal guarantor.

## Facts

State Bank of India (SBI) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against Mr. Gopal Parsad Agarwal, who is a personal guarantor to Vandana Vidhyut Limited (VVL). VVL had availed credit facilities amounting to Rs. 340,30,24,040.34 from a consortium of banks, including SBI, secured by personal guarantees. Mr. Agarwal executed personal guarantees on multiple dates, including 09.04.2009, 28.03.2013, 31.03.2010, and 22.08.2014. VVL defaulted on its payments, leading SBI to issue a demand notice dated 21.06.2021 for Rs. 693,82,24,225.81. A CIRP proceeding had already been initiated against VVL vide order dated 26.04.2018 by Hon'ble NCLT Mumbai Bench. The Committee of Creditors (COC) voted for the liquidation of VVL. The applicant

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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 IBC, 2016, allows a creditor to file an application for initiating

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**Reasoning:** The court considered the fact that Mr. Gopal Parsad Agarwal was a personal guarantor to

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**Interpretation:** Section 95(1) of the IBC, 2016, provides a mechanism for creditors to recover

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**Application:** The court applied Section 95(1) of the IBC, 2016, to the facts of the case,

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## Parties

- **Judges:** P. Moha…; Satya Ranjan…
- **Appellants:** State Bank of…
- **Respondents:** Vandana Vidhyut…; Gopal Parsad…
- **Advocates:** D. P. Sa…

## Timeline

- **2010-10-27 — Guarantee…**: Deed of Guarantee…
- **2018-04-26 — CIRP Init…**: CIRP initiated against the…

## 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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