# State Bank of India vs. India Power Corporation Ltd

> NCLT judgment dated 2026-05-15. Citation: TCN-2026-NCLT-00523. State Bank of India (Financial Creditor) filed a Section 7 IBC petition against India Power…

- **Court:** NCLT
- **Order date:** 15 May 2026
- **Citation:** TCN-2026-NCLT-00523
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-hyderabad/state-bank-of-india-vs-india-power-corporation-ltd-pvaaj

## Summary

### Background

State Bank of India (Financial Creditor) filed a Section 7 IBC petition against India Power Corporation Ltd (Corporate Debtor), which acted as a corporate guarantor for Meenakshi Energy Limited (Principal Borrower). The petition was initially dismissed but remanded by the Supreme Court for fresh consideration. IPCL challenged the enforceability of the Corporate Guarantee, alleging fraud, coercion, and non-compliance with WBERC regulations, and claimed the debt was discharged by invocation of pledged shares.

## Facts

State Bank of India (Financial Creditor/SBI) filed a Petition under Section 7 of the IBC, 2016, seeking initiation of CIRP against M/s. India Power Corporation Limited (Corporate Debtor/IPCL).

IPCL acted as a Corporate Guarantor for financial facilities availed by M/s. Meenakshi Energy Limited (Principal Borrower/MEL).

The Petition was initially rejected by the Adjudicating Authority on 30.10.2023, but later remanded by the Supreme Court on 14.02.2025 for fresh consideration.

A Consortium of Lenders, including SBI and its Associate Banks, sanctioned and disbursed credit facilities to MEL under Phase I and Phase II Loan Agreements.

Associate Banks were amalgamated with SBI on 01.04.2017, vesting all rights in SBI.

…

## Issues and analysis

### Issue 1: Whether the Deed of Corporate Guarantee dated 23.09.2016 was obtained by fraud, coercion, undue …

**Ratio:** The Corporate Guarantee was consciously and voluntarily executed by IPCL as part of a

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**Reasoning:** IPCL never denied executing the Guarantee Deed. IPCL's Director, Mr. Asok Kumar Goswami,

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**Interpretation:** Commercial transactions between sophisticated entities, entered into after

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**Application:** IPCL's conduct, including the affidavit, the commercial nature of the

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## Parties

- **Judges:** Rajeev Bhardwaj,…; Sanjay Puri,…
- **Appellants:** State Bank of…; M/s. India Power…; +1 more
- **Respondents:** India Power…
- **Other parties:** CoC…; T. Veerabha…; +4 more
- **Advocates:** Shiva…; Anirban Bhattachar…; +5 more

## Timeline

- **2009-07-10 — Phase I Loan A…**: Common Loan Agreement (Phase I)…
- **2010-10-01 — Phase II Loan…**: Common Loan Agreement (Phase II)…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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