# In the matter of State Bank of India Vs. Sri Kailashchandra Sukanraj Jain, CP (IB) No. 140/95/HBD/2021

> NCLT judgment dated 2022-04-04. Citation: TCN-2022-NCLT-03409. The State Bank of India (Financial Creditor) filed a petition under Section 95 of the…

- **Court:** NCLT
- **Order date:** 4 Apr 2022
- **Citation:** TCN-2022-NCLT-03409
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-sri-kailashchandra-sukanraj-jain-cp-05bd8876

## Summary

### Background

The State Bank of India (Financial Creditor) filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Individual Insolvency Resolution Process against Smt. Kailashchandra Sukanraj Jain, the Personal Guarantor of RE Cables and Conductors Private Limited. RE Cables and Conductors Pvt Ltd (under liquidation) had been granted various credit facilities aggregating to Rs.59.80 crores by the Applicant/financial creditor. The limits were renewed with enhancements, reaching Rs. 72.05 crores on 30.03.2016. Respondent No.2 along with Respondent No.1 and other personal guarantors failed to adhere to the terms of sanction and service of loan liability, leading to classification of the accounts as NPA on 28.12.2017. The corporate

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## Facts

State Bank of India extended credit facilities to RE Cables and Conductors Pvt Ltd, which were later enhanced to Rs. 72.05 crores. Kailashchandra Sukanraj Jain acted as the personal guarantor for these facilities. RE Cables and Conductors Pvt Ltd defaulted on their repayment obligations, leading to their account being classified as a Non-Performing Asset (NPA) on 2017-12-28. The bank initiated recovery proceedings under the SARFAESI Act, and an Original Application (OA) was filed before the Debt Recovery Tribunal (DRT). The DRT passed an ex-parte order against the guarantors. The corporate debtor was already undergoing Corporate Insolvency Resolution Process (CIRP). The bank then filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC) to initiate

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## Issues and analysis

### Issue 1: Whether Corporate Insolvency Resolution Process can be ordered against respondent no.1/ Personal …

**Ratio:** The ratio is based on the coextensive liability of the personal guarantor with the

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**Reasoning:** The court reasoned that the personal guarantor did not contest the matter despite being

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**Interpretation:** The interpretation is that a personal guarantor's liability is coextensive with

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. VEERA BRAHMA…
- **Appellants:** State Bank of…
- **Respondents:** RE Cables &…; Kailashchandra…
- **Advocates:** Krishna Mohan…; Ms.Sandhy…

## Timeline

- **2016-03-30 — Renewal of…**: The credit limits were renewed with…
- **2017-02-09 — Renewal with R…**: The limits were renewed with a reduction…

## 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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