# In the matter of State Bank of India Vs. T Yugandhar, CP (IB)/131/2022

> NCLT judgment dated 2022-06-21. Citation: TCN-2022-NCLT-02109. 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-02109
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-t-yugandhar-cp-9fac5f2e

## 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 Yugandhar, the Personal Guarantor of M/s. Chadalavada Infratech Ltd. The Petitioner Bank had granted various credit facilities to the Corporate Debtor, for which the Personal Guarantor stood as a guarantor for Rs. 157.27 Crores under a guarantee agreement dated 24.05.2014. When the credit limits were enhanced/modified, the Personal Guarantor executed supplemental deeds of guarantee and joined as a party to a

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## Facts

State Bank of India (SBI) granted credit facilities to Chadalavada Infratech Ltd, for which T. Yugandhar stood as a personal guarantor. The guarantee agreement was initially for Rs. 157.27 Crores, dated 24.05.2014. When the credit limits were modified, T. Yugandhar executed supplemental deeds of guarantee and joined a restructuring package agreement. The outstanding debt as of 15.04.2011 was Rs. 167,56,23,293.24, and the total amount in default was Rs. 250,90,45,531.03. SBI initiated actions under the SARFAESI Act, 2002, and filed an application under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993. SBI also filed an application under Section 7 of the IBC against Chadalavada Infratech Ltd, which was admitted on 23.09.2021. SBI issued a demand notice to T.

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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 documents submitted by the Petitioner Bank, the

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**Interpretation:** Section 95 read with Section 100 of the Code, allows a creditor to initiate

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**Application:** Given that the Personal Guarantor, Shri. T Yugandhar, did not contest the

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. VEERA BRAHMA…
- **Appellants:** State Bank of…
- **Respondents:** Chadalavada…; T. Yuga…
- **Advocates:** Alluri Krishnam…; D A Suryanarayana…

## Timeline

- **2014-05-24 — Deed of Gua…**: Guarantee agreement executed by the…
- **2016-02-03 — Supplemental Deed of…**: Personal Guarantor 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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