# In the matter of State Bank of India Vs. Uppalapati Venkat Rama Rao, CP (IB) No. 397/95/HDB/2020

> NCLT judgment dated 2022-04-21. Citation: TCN-2022-NCLT-03154. The State Bank of India, acting as the Financial Creditor, filed a petition under Section 95 of…

- **Court:** NCLT
- **Order date:** 21 Apr 2022
- **Citation:** TCN-2022-NCLT-03154
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-uppalapati-venkat-rama-rao-cp-941b4e57

## Summary

### Background

The State Bank of India, acting as the Financial Creditor, filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7(2) of the Insolvency & 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 Vuppalapati Venkata Rama Rao, the Personal Guarantor of M/s VMC Systems Limited. The petitioner, along with other lenders under consortium, had sanctioned fund-based and non-fund-based credit facilities to the Corporate Debtor, which were renewed periodically. The last renewal was made through a sanction letter dated 21.03.2013. The Corporate Debtor defaulted on repayments, leading

…

## Facts

The State Bank of India (Financial Creditor) sanctioned credit facilities to M/s VMC Systems Limited (Corporate Debtor), with Shri Vuppalapati Venkata Rama Rao acting as the Personal Guarantor. The total credit facilities amounted to Rs. 393.97 crores, including fund-based (FB) and non-fund-based (NFB) facilities. The Corporate Debtor defaulted in repaying the loan amounts, leading to the account being classified as a Non-Performing Asset (NPA) on 23.01.2014. The Financial Creditor initiated recovery proceedings under the SARFAESI Act, 2002, and obtained a decree and Recovery Certificate from the Debt Recovery Tribunal-II (DRT-II) on 31.10.2017. The outstanding amount in default was Rs. 837,14,68,122.93. The Financial Creditor also initiated Corporate Insolvency

…

## Issues and analysis

### Issue 1: Whether Insolvency Resolution Process can be ordered …

**Ratio:** The Tribunal held that if the debt, default, and initiation of CIRP against the Corporate

…

**Reasoning:** The Tribunal considered the documents, revival letters, statement of account, order, and

…

**Interpretation:** This issue concerns the eligibility of initiating insolvency proceedings

…

**Application:** Given that the debt, default, and CIRP against the Corporate Debtor were not in

…

## Parties

- **Judges:** Venkata Ramakrishn…; SH. VEERA BRAHMA…
- **Appellants:** State Bank of…
- **Respondents:** VMC Systems…; Uppalapati…

## Timeline

- **2013-03-21 — Sanction…**: Last renewal to the credit facilities limits was made by the Financial Creditor through a…
- **2013-10-26 — Bank Guarantee…**: The BG was invoked as the Corporate Debtor committed defaults in repaying the loan…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-uppalapati-venkat-rama-rao-cp-941b4e57