# In the matter of State Bank of India Vs. T Shri Ganesh, CP (IB)/129/2022

> NCLT judgment dated 2022-06-21. Citation: TCN-2022-NCLT-02118. The State Bank of India filed a petition under Section 95 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 21 Jun 2022
- **Citation:** TCN-2022-NCLT-02118
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-t-shri-ganesh-cp-44957f05

## Summary

### Background

The State Bank of India filed a petition under Section 95 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, seeking initiation of the Insolvency Resolution Process against Shri. T Sri Ganesh, the Personal Guarantor of Chadalavada Infratech Ltd (Corporate Debtor). The bank had granted credit facilities to the Corporate Debtor, for which the Personal Guarantor stood as guarantor for Rs. 157.27 Crores under a guarantee agreement dated 2014-05-24. The credit limits were later enhanced/modified, and the Personal Guarantor executed supplemental deeds of guarantee and joined a restructuring package

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## Facts

State Bank of India (SBI) extended credit facilities to Chadalavada Infratech Ltd, with Mr. T. Sri Ganesh acting as the personal guarantor for a sum of Rs. 157.27 Crores, as per a guarantee agreement dated 2014-05-24. Subsequent enhancements and modifications to the credit limits led to the execution of supplemental guarantee deeds by Mr. Ganesh, who also became a party to a restructuring package agreement. The agreement stipulated that the guarantee was continuous, irrevocable, and enforceable, irrespective of any disputes between SBI and the borrower. As of 2011-04-15, the account was classified as a Non-Performing Asset (NPA), with an outstanding debt of Rs. 167,56,23,293.24, which, inclusive of interest, escalated to Rs. 250,90,45,531.03. SBI initiated recovery

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## Issues and analysis

### Issue 1: Whether an Insolvency Resolution Process can be ordered against the Personal Guarantor under …

**Ratio:** The legal principle applied is that under Section 100 of the Insolvency and Bankruptcy

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**Reasoning:** The court reasoned that the Petitioner Bank had initiated Corporate Insolvency Resolution

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**Interpretation:** The interpretation of Section 100 involves understanding the circumstances

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**Application:** In this case, the court applied the ratio by noting that the Personal Guarantor

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. VEERA BRAHMA…
- **Appellants:** State Bank of…
- **Respondents:** Chadalavada…; T. Sri G…

## Timeline

- **2011-04-15 — NPA Date…**: Account declared as…
- **2014-05-24 — Deed of Gua…**: Deed of Guarantee executed…

## 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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