Authority: National Company Law Tribunal, Division Bench (Court-I), Chennai
Order Date: 16 July 2026
Case Overview
The National Company Law Tribunal (NCLT) Chennai heard petition IBA/712/2020 filed by State Bank of India under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 against personal guarantor Ashok Agarwal. The petitioner is State Bank of India, and the respondent is Ashok Agarwal, who provided a personal guarantee for corporate debt.
During the hearing, the personal guarantor filed an affidavit claiming that at State Bank of India's insistence, the Scheme Proponent had deposited Rs. 2.0 Crores exclusively for the consideration of releasing both the Personal Guarantee and Corporate Guarantee. This payment was stated to be independent of the consideration payable under the scheme. Additionally, the Scheme Proponent has paid Rs. 22.0 Crores to all financial creditors for scheme implementation. Despite these payments, SBI neither released the guarantees nor refunded the Rs. 2.0 Crores amount. The guarantors subsequently made a further settlement proposal offering an additional Rs. 75.0 Lakhs over and above the Rs. 2.0 Crores already with the bank.
The affidavit alleged that while rejecting this proposal, SBI failed to consider the Rs. 2.0 Crores amount already deposited with them. Meanwhile, counsel for SBI submitted that the respondent/personal guarantor has agreed to withdraw a separate petition filed before the Hon'ble High Court regarding declaration of fraud and has forwarded the matter to the bank for consideration.
Final Outcome
The NCLT granted both parties one week's time for further consideration of the matter. The registry was directed to accept the hard copy of the affidavit filed by the personal guarantor. The petition and application have been listed for next hearing on 03 August 2026.
Topics: Personal Guarantee, Insolvency Proceeding