Authority: National Company Law Tribunal (NCLT), Hyderabad Bench – I

Order Date: 18 June 2026

Case Overview

The State Bank of India (SBI), the Financial Creditor and Applicant, filed an application under Sections 121 and 123 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate bankruptcy proceedings against Mr. Kailash Chandra Agarwal. Mr. Agarwal is the personal guarantor for credit facilities originally sanctioned to M/s Nikhil Refineries Private Limited (the Corporate Debtor) in 2010 and enhanced to Rs. 100.80 crores in 2011. He had executed a Deed of Guarantee dated 21.04.2011 in favour of SBI.

The Corporate Debtor defaulted on its repayments, leading SBI to declare the account as a Non-Performing Asset (NPA). SBI subsequently obtained a Recovery Certificate (RC.No.43/2023) from the Debt Recovery Tribunal (DRT), Hyderabad, on 09.02.2023, which held both the Corporate Debtor and the Personal Guarantor jointly and severally liable for the debt.

SBI had initially filed an application under Section 95 of the IBC (CP(IB) No.175/95/HDB/2024) for the insolvency of the personal guarantor, which was admitted by the NCLT on 04.03.2025. As the personal guarantor failed to submit a repayment plan, the Resolution Professional filed a report (IA(IBC) No. 1453/2025) seeking closure of insolvency and permission to initiate bankruptcy. The NCLT allowed this application on 10.12.2025, granting SBI liberty to file the present bankruptcy application.

The total default amount claimed by SBI and admitted in the proceedings is Rs. 143,18,04,433/- (One Hundred Forty-Three Crores Eighteen Lakhs Four Thousand Four Hundred Thirty-Three Rupees Only), calculated until 31.01.2026. This comprises a principal amount of Rs. 52,90,87,234.3/- and interest of Rs. 90,27,17,198.7/-.

Final Outcome

The NCLT, having heard SBI's counsel and noting the ex-parte status of the respondent, admitted the application. Mr. Kailash Chandra Agarwal was declared 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.
  • The vesting of the bankrupt's estate (excluding assets under Section 155(2) of the IBC) with the trustee, who is to take immediate custody of all assets.
  • A directive for the bankrupt to submit his statement of financial position to the trustee within seven days.
  • Instructions for the trustee to issue public notices in newspapers, send notices to creditors, and adhere to various sections of the IBC and IBBI regulations.
  • Requirements for the trustee to submit a preliminary report within 90 days and quarterly progress reports thereafter.
  • The imposition of all disqualifications and restrictions on the bankrupt as prescribed under Sections 140 and 141 of the IBC from the date of the order.

The bankruptcy order will remain in effect until the debtor is discharged under Section 138 of the IBC.

Topics: Personal Guarantor Bankruptcy, NCLT Order, Debt Recovery