# In the matter of State Bank of India Vs. T Pavani, CP (IB)/126/2022

> NCLT judgment dated 2022-06-21. Citation: TCN-2022-NCLT-04647. State Bank of India filed a petition under Section 95 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 21 Jun 2022
- **Citation:** TCN-2022-NCLT-04647
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-hyderabad/state-bank-of-india-vs-t-pavani-cp-1692b658

## Summary

### Background

State Bank of India filed a petition under Section 95 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, seeking initiation of the Insolvency Resolution Process against Smt. T Pavani, the Personal Guarantor of M/s. Chadalavada Infratech Ltd.

## Facts

State Bank of India filed a petition under Section 95 of the Insolvency and Bankruptcy Code, 2016 against Smt. T Pavani, the Personal Guarantor of M/s. Chadalavada Infratech Ltd.

The Petitioner Bank granted credit facilities to Chadalavada Infratech Ltd, for which T Pavani stood as a guarantor vide guarantee agreement dated 20.10.2010.

The outstanding debt as on 15.04.2011 was Rs. 167,56,23,293.24, and the total amount in default is Rs. 250,90,45,531.03.

The Petitioner Bank initiated actions under SARFAESI Act and Recovery of Debts and Bankruptcy Act, 1993.

The Adjudicating Authority granted interim-moratorium on 20.04.2022 and appointed Shri. Maligi Madhusudhana Reddy as Resolution Professional.

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## Issues and analysis

### Issue 1: Whether an Insolvency Resolution Process can be ordered against the Personal Guarantor under …

**Ratio:** The Adjudicating Authority admitted the Company Petition under Section 95 of the Code,

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**Reasoning:** The Personal Guarantor did not contest the instant petition despite service of notice and

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**Interpretation:** Section 100 of the IBC allows for the initiation of the Insolvency Resolution

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**Application:** The Adjudicating Authority applied Section 100 of the IBC to initiate the

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## Parties

- **Judges:** Venkata Ramakrishn…; Veera Brahma Rao…
- **Appellants:** State Bank of…
- **Respondents:** Chadalavada…; T. Pa…; +1 more
- **Other parties:** Maligi Madhusudhan…
- **Advocates:** Alluri Krishnam…; D A Suryanarayana…

## Timeline

- **2010-10-20 — Guarantee Ag…**: Guarantee agreement between the Personal…
- **2011-04-15 — Non-Performing Account…**: Date on which the account was…

## 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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