Authority: National Company Law Tribunal, Hyderabad Bench – I (Coram: Sri Rajeev Bhardwaj, Hon'ble Member (Judicial) and Sri Sanjay Puri, Hon'ble Member (Technical))
Order Date: 18 June 2026
Case Overview
The State Bank of India (SBI) filed an application (IA(IBC) No.404/2026) under Sections 121 and 123 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019, seeking to initiate bankruptcy proceedings against Mr. Banwarilal Agarwal, the personal guarantor for corporate debtor M/s Nikhil Refineries Private Limited.
The dispute originated from credit facilities sanctioned by SBI to Nikhil Refineries, initially for Rs. 77 Crores on 23 April 2010 and enhanced to Rs. 100.80 Crores on 28 March 2011. Mr. Agarwal executed a Deed of Guarantee on 21 April 2011 to secure the repayment. The corporate debtor defaulted, leading SBI to declare the account as a non-performing asset (NPA).
SBI had previously obtained a Recovery Certificate (RC.No.43/2023) from the Debt Recovery Tribunal, Hyderabad, on 9 February 2023, making the corporate debtor and the personal guarantor jointly and severally liable. SBI then filed an insolvency application (CP(IB) No.179/95/HDB/2024) under Section 95 of the IBC against the guarantor, which was admitted by the NCLT on 4 March 2025. As no repayment plan was submitted by the guarantor, the Resolution Professional filed a report (IA(IBC) No.1458/2025) seeking closure of insolvency and permission to initiate bankruptcy. The NCLT allowed this application on 10 December 2025, granting SBI liberty to file the present bankruptcy application.
The total default amount claimed is Rs. 143,18,04,433/-, comprising a principal of Rs. 52,90,87,234.3/- and interest of Rs. 90,27,17,198.7/-, calculated until 31 January 2026.
Final Outcome
The NCLT allowed the application and declared Mr. Banwarilal Agarwal bankrupt. The tribunal issued comprehensive directions, including:
- The appointment of Mr. Murali Mohan Chevuturi (IBBI Regn. No. IBBI/IPA-003/IP-N00307/2020-2021/13464) as the Bankruptcy Trustee under Section 125 of the IBC.
- The estate of the bankrupt, excluding assets mentioned in Section 155(2) of the IBC, shall vest with the Bankruptcy Trustee, who must take custody of all assets and ensure their preservation.
- The bankrupt must submit his statement of financial position to the trustee within seven days.
- The trustee must issue notices to creditors within ten days and publish a public notice in one English and one vernacular newspaper.
- The bankruptcy order has immediate effect, restricting legal actions against the bankrupt's property without the tribunal's leave.
- The trustee is required to submit a preliminary report within ninety days and quarterly progress reports thereafter.
- The bankruptcy will continue until the debtor is discharged under Section 138 of the IBC.
Topics: Personal Guarantor Bankruptcy, Insolvency Proceeding, Debt Recovery