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

> NCLT judgment dated 2024-10-01. Citation: TCN-2024-NCLT-00509. 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-00509
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-surekha-a6aa2059

## 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 31.03.2023, with further interest from 01.04.2023.

## 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 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. The total amount of default is Rs. 232,65,85,673/- as of 31.03.2023, plus interest. The Financial Creditor provided credit facilities to the Corporate Debtor, and the Personal Guarantor furnished an unconditional personal guarantee on 24.12.2014. The Corporate Debtor's account was classified as Non-Performing Asset on 25.01.2016. The Financial Creditor

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 95 of the IBC for initiating …

**Ratio:** Section 95(1) of the Insolvency and Bankruptcy Code, 2016 allows a creditor to initiate

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**Reasoning:** The court considered the submissions of the Financial Creditor and the report of the

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**Interpretation:** Section 95(1) provides a mechanism for creditors to recover debts from personal

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**Application:** The court found that the Financial Creditor had provided sufficient evidence of

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## Parties

- **Judges:** Reeta K…; Madhu S…
- **Appellants:** State Bank of…
- **Respondents:** M/s MSM Steels…; Surekha Sidramappa…

## Timeline

- **2014-12-24 — Personal Guarantee…**: The Respondent furnished her unconditional and personal guarantee in favour of the…
- **2016-01-25 — Account Classified as…**: The Corporate Debtor's account was…

## 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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