# In the matter of State Bank of India Vs. Vivek Sachdev, CP (IB)-754/ND/2021

> NCLT judgment dated 2023-03-03. Citation: TCN-2023-NCLT-04364. The State Bank of India sanctioned credit facilities to M/s Auto Décor Private Limited…

- **Court:** NCLT
- **Order date:** 3 Mar 2023
- **Citation:** TCN-2023-NCLT-04364
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/state-bank-of-india-vs-vivek-sachdev-cp-77744205

## Summary

### Background

The State Bank of India sanctioned credit facilities to M/s Auto Décor Private Limited (Corporate Debtor), which were reviewed and enhanced over time. The Corporate Debtor and personal guarantors requested renewal of working capital. The bank sanctioned a Synthetic Letter of Credit (SLC) of Rs. 2.00 Crores, later converted to a Working Capital Term Loan (WCTL) of Rs. 49.67 Crores, and further enhanced to Rs. 51.17 Crores. These facilities were secured by personal guarantees, including that of Mr. Vivek Sachdev. A compromise proposal for Rs. 16.50 crore was sanctioned but lapsed, and the deposit was forfeited. The Corporate Debtor requested revival of the compromise. The bank initiated recovery proceedings at the Debt Recovery Tribunal-II. A CIRP was initiated by APPL

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## Facts

The State Bank of India (SBI) extended credit facilities to Auto Décor Private Limited, which were periodically reviewed and increased. These facilities were backed by personal guarantees, including one from Mr. Vivek Sachdev. SBI sanctioned a Synthetic Letter of Credit (SLC) of Rs. 2.00 Crores, which was later converted into a Working Capital Term Loan (WCTL) of Rs. 49.67 Crores, and subsequently increased to Rs. 51.17 Crores. A compromise proposal for Rs. 16.50 crore was sanctioned but lapsed due to non-payment. The Corporate Debtor requested a revival of the compromise. SBI initiated recovery proceedings at the Debt Recovery Tribunal-II. A CIRP was initiated against the Corporate Debtor by APPL Industries Limited. Mr. Ajay Gupta was appointed as the Resolution

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## Issues and analysis

### Issue 1: Whether the application filed by the Applicant bank satisfies the requirements set out in Section …

**Ratio:** Section 95 of the IBC, 2016 outlines the requirements for initiating insolvency

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**Reasoning:** The Resolution Professional (RP) confirmed that the application met the requirements of

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**Interpretation:** Section 95 sets the procedural and substantive conditions for an application to

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**Application:** The RP's confirmation that the application met the requirements of Section 95

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## Parties

- **Judges:** SHRI. ASHOK KUMAR…; Shri. L. N.…
- **Appellants:** The State Bank of…
- **Respondents:** M/s Auto Décor…; Sh. Vivek S…

## Timeline

- **2013-01-10 — Sanction…**: Petitioner sanctioned SLC (Synthetic Letter of Credit) of Rs. 02.00 Crores vide…
- **2014-03-15 — Conversion…**: SLC was converted into WCTL (Working Capital Term Loan) vide arrangement letter to the…

## 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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