# In the matter of State Bank of India vs. Thota Chandrakanth

> NCLT judgment dated 2024-03-01. Citation: TCN-2024-NCLT-02274. The case pertains to an application filed by the State Bank of India (Financial Creditor) under…

- **Court:** NCLT
- **Order date:** 1 Mar 2024
- **Citation:** TCN-2024-NCLT-02274
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-thota-chandrakanth-db914c79

## Summary

### Background

The case pertains to an application filed by the State Bank of India (Financial Creditor) under Section 95(1) 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, to initiate the Insolvency Resolution Process against Mr. Thota Chandrakanth (Personal Guarantor/Respondent No.1) of M/s. Turbo Machinery Engineering Industries Limited (Corporate Debtor). The Corporate Debtor had availed credit facilities of Rs. 40,36,00,000/- from the Financial Creditor. The Respondent No.1 stood as guarantor for the repayment of the loan, and Guarantee Deeds were executed. The Corporate Debtor was put into

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## Facts

The State Bank of India (Financial Creditor) filed an application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Mr. Thota Chandrakanth (Personal Guarantor) of M/s. Turbo Machinery Engineering Industries Limited (Corporate Debtor). The Corporate Debtor availed credit facilities of Rs. 40,36,00,000/- from the Financial Creditor, with Mr. Thota Chandrakanth acting as guarantor. The default in payment occurred on 30.06.2013. The Corporate Debtor was put into liquidation on 06.11.2019. The Financial Creditor received a partial payment of Rs. 8,17,18,639.87/- through auction. A demand notice dated 11.08.2021 was issued to the Respondent No.1, but the amount was not paid. The Financial Creditor also

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## Issues and analysis

### Issue 1: Whether the application filed by the State Bank of India under Section 95(1) of the Insolvency and …

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

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**Reasoning:** The court considered the provisions of Section 95(1) of the IBC and the relevant rules,

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**Interpretation:** Section 95(1) of the IBC provides a mechanism for financial creditors to

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**Application:** The court found that the State Bank of India, being the financial creditor, was

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** State Bank of…
- **Respondents:** Turbo Machinery…; Thota Chand…

## Timeline

- **2010-03-02 — Guarantee…**: Guarantee Deeds dated 02.03.2010 were executed between the Financial Creditor and…
- **2012-01-31 — Sanction…**: Sanction letter dated 31.01.2012…

## 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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