# In the matter of State Bank of India vs. Surekha

> NCLT judgment dated 2024-10-01. Citation: TCN-2024-NCLT-00519. The State Bank of India filed a Company Petition under Section 95(1) of the Insolvency and…

- **Court:** NCLT
- **Order date:** 1 Oct 2024
- **Citation:** TCN-2024-NCLT-00519
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-surekha-455535d1

## Summary

### Background

The State Bank of India filed a Company Petition under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process against Mrs. Surekha Sidramappa Malang, who is the Personal Guarantor of the Corporate Debtor, M/s MSM Steels Private Limited. The application was triggered due to the Corporate Debtor's default on debt obligations to the Financial Creditor, for which the Respondent had provided a personal guarantee. The total default amount was Rs. 232,65,85,673 as of 2023-03-31, with further interest accruing from 2023-04-01.

## Facts

The State Bank of India (Financial Creditor) filed a petition against Mrs. Surekha Sidramappa Malang (Personal Guarantor) under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process. Mrs. Malang is the personal guarantor for M/s MSM Steels Private Limited (Corporate Debtor). The Corporate Debtor defaulted on debt obligations to the Financial Creditor, leading to the invocation of the personal guarantee. The total amount in default was Rs. 232,65,85,673 as of 2023-03-31, with interest accruing from 2023-04-01. The Financial Creditor had provided credit facilities to the Corporate Debtor, supported by a Deed of Guarantee dated 2014-12-24. The Corporate Debtor's account was classified as a Non-Performing

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 95(1) of the Insolvency and …

**Ratio:** The ratio is based on Section 95 of the Insolvency and Bankruptcy Code, 2016, which

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**Reasoning:** The court reasoned that the Corporate Debtor had defaulted on its debt obligations, and

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**Interpretation:** Section 95 of the IBC is interpreted to mean that when a corporate debtor

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**Application:** The court applied this ratio to the facts by noting that the Corporate Debtor

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## Parties

- **Judges:** Reeta K…; Madhu S…
- **Appellants:** State Bank of…
- **Respondents:** M/s MSM Steels…; Surekha Sidramappa…
- **Advocates:** Subir K…; Disha…; +2 more

## Timeline

- **2014-04-08 — Sanction…**: Sanction Letter dtd. 08.04.2014 and 27.09.2014…
- **2014-09-27 — Sanction…**: Sanction Letter dtd. 08.04.2014 and 27.09.2014…

## 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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