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 Mr. Subash Chandra Agarwal, the personal guarantor for corporate debtor M/s Nikhil Refineries Private Limited.

The financial creditor, SBI, had sanctioned credit facilities totaling ₹100.80 crores to Nikhil Refineries in 2011, secured by a Deed of Guarantee executed by Mr. Agarwal on 21 April 2011. The corporate debtor defaulted on repayment, 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 earlier initiated insolvency proceedings under Section 95 of the IBC against Mr. Agarwal, which were admitted by the NCLT on 4 March 2025 (CP(IB) No. 178/95/HDB/2024). As no repayment plan was submitted by the guarantor, the Resolution Professional filed an application (IA(IBC) No. 1457/2025) 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 debt claimed by SBI is ₹143,18,04,433/-, comprising a principal amount of ₹52,90,87,234.3 and interest of ₹90,27,17,198.7, calculated up to 31 January 2026.

Final Outcome

The NCLT admitted the application and declared Mr. Subash Chandra Agarwal a bankrupt. The tribunal appointed Mr. Murali Mohan Chevuturi (IBBI Regn. No. IBBI/IPA-003/IP-N00307/2020-2021/13464) as the Bankruptcy Trustee. The order includes comprehensive directions: the bankrupt's estate (excluding assets protected under Section 155(2) of the IBC) vests with the trustee, who must take custody of all assets and ensure their preservation. The bankrupt must submit a statement of financial position within seven days. The trustee is required to issue public notices in newspapers, send notices to creditors, and submit periodic reports to the NCLT. The bankruptcy order remains in effect until the debtor is discharged under Section 138 of the IBC.

Topics: Personal Guarantee, Bankruptcy, Debt Recovery