# In the matter of State Bank of India vs. Utkarsh Malvik Hathi

> NCLT judgment dated 2024-11-08. Citation: TCN-2024-NCLT-00286. The State Bank of India initiated insolvency resolution proceedings against Utkarsh Malvik…

- **Court:** NCLT
- **Order date:** 8 Nov 2024
- **Citation:** TCN-2024-NCLT-00286
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-utkarsh-malvik-hathi-009c5403

## Summary

### Background

The State Bank of India initiated insolvency resolution proceedings against Utkarsh Malvik Hathi, the personal guarantor to M/s. Miku Polymers and Plastics Ltd., due to a default on a debt amounting to Rs. 50,96,14,531.03. The application was filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016. The corporate debtor, M/s Miku Traders, initially availed financial assistance which was later taken over by M/s. Miku Polymers and Plastics Ltd. The applicant bank renewed the credit facility and the personal guarantee was executed by the respondent. After the corporate debtor defaulted, the account was classified as NPA, and the bank issued demand notices and recall notices. The proceedings were initially put on hold due to pending constitutional validity

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## Facts

M/s Miku Traders, initially a partnership firm, availed financial assistance in the form of a Cash Credit Facility of Rs. 55.00 Crores and a Bank Guarantee facility of Rs. 13.00 Crores, totaling Rs. 68.00 Crore. On 01.03.2019, M/s Miku Polymers and Plastics Ltd. took over the business of M/s Miku Traders. The applicant bank renewed the existing credit facility from 44.00 Crores to 37.00 Crores and renewed the bank guarantee facility at Rs. 7.00 Crores on 14.10.2020. Utkarsh Malvik Hathi, as the personal guarantor, executed a Deed of Guarantee on 14.09.2020 in favor of the Applicant Bank/FC to secure the credit facilities granted to the Corporate Debtor. The Corporate Debtor defaulted, leading to the loan accounts being classified as NPA on 05.12.2020. The Applicant

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## Issues and analysis

### Issue 1: Whether the application under Section 95(1) of the IBC for initiating insolvency resolution process …

**Ratio:** Section 95(1) of the IBC allows a creditor to apply for initiating the insolvency

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**Reasoning:** The court considered the facts presented, including the execution of the guarantee, the

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**Interpretation:** Section 95(1) provides a mechanism for creditors to recover debts from personal

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**Application:** The court found that the State Bank of India had presented sufficient evidence

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## Parties

- **Judges:** SHAMMI…; SAMEER…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Miku…; Utkarsh Malvik…

## Timeline

- **2019-03-01 — Business Ta…**: M/s Miku Polymers and Plastics Ltd. took…
- **2020-09-14 — Deed of Gua…**: Utkarsh Malvik Hathi executed a Deed of…

## 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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