# 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-02106. 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-02106
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-t-yugandhar-cp-efb70459

## 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 bank had granted 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. The outstanding debt as of 15.04.2011 was Rs. 167,56,23,293.24, with the total amount in default being Rs. 250,90,45,531.03.

## Facts

State Bank of India granted credit facilities to Chadalavada Infratech Ltd, with T Yugandhar acting as the personal guarantor for Rs. 157.27 Crores as per the guarantee agreement dated 24.05.2014. The outstanding debt as of 15.04.2011 was Rs. 167,56,23,293.24, with a total default amount of Rs. 250,90,45,531.03. The bank initiated actions under the SARFAESI Act, 2002, and filed an application under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993. The Corporate Insolvency Resolution Process was initiated against Chadalavada Infratech Limited under Section 7 of the IBC, 2016, and was admitted on 23.09.2021. A demand notice was issued to T Yugandhar on 21.10.2021, but he failed to repay the amount. The Resolution Professional recommended the admission of the

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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 noted that the Petitioner Bank initiated Corporate Insolvency

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**Interpretation:** Section 100 is interpreted to mean that if a personal guarantor fails to

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**Application:** In this case, the Personal Guarantor, Shri. T Yugandhar, did not contest the

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## Parties

- **Judges:** Venkata Ramakrishn…; Veera Brahma Rao…
- **Appellants:** State Bank of…
- **Respondents:** Chadalavada…; T. Yuga…
- **Advocates:** Shri. Alluri…; Shri. D A…

## Timeline

- **2014-05-24 — Guarantee Ag…**: Guarantee agreement dated…
- **2011-04-15 — Non-Performing Account…**: Outstanding debt as on Non-Performing Account…

## 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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