Authority: National Company Law Tribunal, Hyderabad Bench – I

Order Date: 18 June 2026

Case Overview

The State Bank of India (SBI) filed an application 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. The application sought to initiate bankruptcy proceedings against Smt. Komal Devi Agarwal, a personal guarantor for M/s Nikhil Refineries Private Limited (the Corporate Debtor).

The dispute originated from credit facilities sanctioned to Nikhil Refineries, initially for Rs. 77 Crores on 23 April 2010 and later enhanced to Rs. 100.80 Crores on 28 March 2011. Komal Devi Agarwal executed a Deed of Guarantee on 21 April 2011 to secure this debt. The Corporate Debtor defaulted on repayment, leading SBI to classify the account as a Non-Performing Asset (NPA).

SBI initiated recovery proceedings by filing OA No.1378 of 2017 before the Debt Recovery Tribunal (DRT), Hyderabad. The DRT issued Recovery Certificate No.43/2023 on 9 February 2023, making the Corporate Debtor and the Personal Guarantor jointly and severally liable for the debt.

Subsequently, SBI filed CP(IB) No.176/95/HDB/2024 under Section 95 of the IBC, 2016, seeking the admission of Komal Devi Agarwal into insolvency proceedings. The NCLT admitted this petition on 4 March 2025. As the Personal Guarantor failed to submit a repayment plan, the Resolution Professional filed IA(IBC) No. 1454/2025, seeking closure of insolvency proceedings 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 amount in default claimed by SBI 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 Smt. Komal Devi Agarwal bankrupt. The tribunal issued comprehensive directions:

  • Appointed Mr. Murali Mohan Chevuturi (IBBI Regn. No. IBBI/IPA-003/IP-N00307/2020-2021/13464) as the Bankruptcy Trustee under Section 125 of the Code.
  • Directed the registry to provide a copy of the bankruptcy order and application to creditors and the trustee within a week.
  • Ordered the bankrupt to submit a statement of financial position to the trustee within seven days.
  • Ruled that the estate of the bankrupt (excluding assets mentioned in Section 155(2)) shall vest with the Bankruptcy Trustee, who must take custody of all assets, properties, and actionable claims.
  • Directed the trustee to issue notices to creditors within ten days and publish a public notice in English and vernacular newspapers.
  • Imposed restrictions on legal proceedings against the bankrupt's property without the tribunal's leave.
  • Subjected the bankrupt to disqualifications and restrictions under Sections 140 and 141 of the Code.
  • Mandated the trustee to submit a preliminary report within ninety days and quarterly progress reports thereafter.
  • The bankruptcy order will remain in effect until the debtor is discharged under Section 138 of the IBC, 2016.

Topics: Personal Guarantor Bankruptcy, NCLT Order, Debt Recovery