Authority: National Company Law Tribunal, Hyderabad Bench – I (Sh. Rajeev Bhardwaj, Hon'ble Member (Judicial) and Sh. 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.401 of 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. The application sought to initiate bankruptcy proceedings against Smt. Kusum Devi Agarwal, the personal guarantor for M/s Nikhil Refineries Private Limited (Corporate Debtor).

The dispute originated from credit facilities sanctioned to Nikhil Refineries, initially for ₹77 crores on 23 April 2010 and enhanced to ₹100.80 crores on 28 March 2011. Smt. Kusum Devi 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 subsequently 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 for the debt.

SBI had previously filed CP(IB) No.177/95/HDB/2024 under Section 95 of the IBC, which was admitted by the NCLT on 4 March 2025, initiating insolvency proceedings against the Personal Guarantor. As no repayment plan was submitted, the Resolution Professional filed IA(IBC) No. 1456/2025, seeking closure of insolvency and permission to initiate bankruptcy. The NCLT allowed this application on 18 November 2025, granting SBI liberty to file the present bankruptcy application.

The total default amount claimed is ₹143,18,04,433/- (One Hundred Forty-Three Crores Eighteen Lakhs Four Thousand Four Hundred Thirty-Three Rupees), comprising a principal of ₹52,90,87,234.3/- (Fifty-Two Crores Ninety Lakhs Eighty-Seven Thousand Two Hundred Thirty-Four Rupees and Three Paise) and interest of ₹90,27,17,198.7/- (Ninety Crores Twenty-Seven Lakhs Seventeen Thousand One Hundred Ninety-Eight Rupees and Seven Paise) calculated until 31 January 2026.

Final Outcome

The NCLT admitted the application and declared Smt. Kusum Devi Agarwal bankrupt. The tribunal 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 IBC. The bankrupt's estate, excluding assets mentioned in Section 155(2) of the Code, will vest with the Bankruptcy Trustee, who is directed to take custody of all assets, properties, and actionable claims.

The bankrupt must submit a statement of financial position to the trustee within seven days and is subject to disqualifications and restrictions under Sections 140 and 141 of the IBC. The Bankruptcy Trustee is instructed to issue public notices in newspapers, send notices to creditors, and submit a preliminary report within ninety days. The bankruptcy order will remain in effect until the debtor is discharged under Section 138 of the IBC.

Topics: Personal Guarantor Bankruptcy, Debt Recovery, Insolvency Proceedings