# In the matter of State Bank of India Vs. T V Subbaiah, CP (IB)/117/2022

> NCLT judgment dated 2022-06-21. Citation: TCN-2022-NCLT-02112. This case involves a petition filed by the State Bank of India under Section 95 of the…

- **Court:** NCLT
- **Order date:** 21 Jun 2022
- **Citation:** TCN-2022-NCLT-02112
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-t-v-subbaiah-cp-5d8c2c3f

## Summary

### Background

This case involves a petition filed by the State Bank of India under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Insolvency Resolution Process against Mr. T V Subbaiah, the Personal Guarantor of M/s. Chadalavada Infratech Ltd (Corporate Debtor). The Petitioner Bank had granted various credit facilities to the Corporate Debtor, for which the Personal Guarantor stood as a guarantor for Rs. 7.00 Crores via a guarantee agreement dated 15.02.2006. The credit limits were enhanced/modified over time, with the Personal Guarantor executing supplemental deeds of guarantee and joining as a party to restructuring agreements. The outstanding debt as of the Non-Performing Account date (15.04.2011) was Rs. 167,56,23,293.24, with a total default

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## Facts

The State Bank of India (Petitioner) filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process (IRP) against Mr. T V Subbaiah (Personal Guarantor) of M/s. Chadalavada Infratech Ltd (Corporate Debtor). The Petitioner had extended credit facilities to the Corporate Debtor, with Mr. Subbaiah acting as a guarantor for Rs. 7.00 Crores since 15.02.2006. The guarantee was reinforced through supplemental deeds and restructuring agreements. As of 15.04.2011, the outstanding debt was Rs. 167,56,23,293.24, escalating to a total default of Rs. 250,90,45,531.03. The Petitioner initiated actions under SARFAESI Act, 2002, and the Recovery of Debts and Bankruptcy Act, 1993. A separate CIRP was initiated against

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## Issues and analysis

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

**Ratio:** Section 100 of the Insolvency and Bankruptcy Code, 2016, allows for the initiation of an

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**Reasoning:** The Adjudicating Authority considered the evidence presented by the Petitioner Bank,

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**Interpretation:** Section 100 provides the legal basis for initiating the IRP against a personal

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**Application:** In this case, the ratio and reasoning were applied to the specific facts,

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## Parties

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

## Timeline

- **2006-02-15 — Deed of Gua…**: Guarantee agreement executed by the…
- **2011-04-15 — Non-Performing Account…**: Account declared as Non-Performing with an…

## 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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