Ms. Manju Sirohi vs Assets Care & Reconstruction Enterprise Ltd. & Anr. - We need to appreciate that the estate, comprising all property belonging to the bankrupt at the commencement date, vests in the Trustee by operation of law, without any conveyance, assignment or transfer. Thus, it is clear that money at credit in a bank account is property and from 21.05.2025, the balance was the Trustee’s to hold, and every withdrawal by the Appellant was a dealing with property that was not hers to deal with.

 NCLAT (2026.10.07) in Ms. Manju Sirohi vs Assets Care & Reconstruction Enterprise Ltd. & Anr.  [Comp. App. (AT) (Ins) No. 1772 of 2026 & I.A. No. 6703 of 2026] held that; 

• We need to appreciate that the estate, comprising all property belonging to the bankrupt at the commencement date, vests in the Trustee by operation of law, without any conveyance, assignment or transfer. Thus, it is clear that money at credit in a bank account is property and from 21.05.2025, the balance was the Trustee’s to hold, and every withdrawal by the Appellant was a dealing with property that was not hers to deal with.

• Section 155(2)(a) excludes only “excluded assets” as defined in section 79(14) of the code. The Clause (c) protects only unencumbered personal ornaments which cannot be parted with, in accordance with religious usage, of a value not exceeding Rs. 1,00,000/- (Rule 5(a) of the 2019 Bankruptcy Rules).

• It has also been brought to our notice that on the commencement date, the Appellant held no ornaments (her Form-E shows jewellery as Nil but a bank balance, which none of clauses (a) to (e) of section 79(14) of the code mentions, and nothing in the Code carries the protected character over to sale proceeds.

Excerpts of the order;

# 1. There are two appeals before us i.e. Company Appeal (AT) (INS) No. 1772 of 2026 and Company Appeal (AT) (INS) No. 1773 of 2026 filed by the Appellant, Manju Sirohi.

# 2. The appeal is filed by the Appellant i.e., Manju Sirohi who is a Personal Guarantor of M/s Saha Infratech Private Limited under Section 61 of the Insolvency and Bankruptcy Code, 2016, (“Code”) arising out of Impugned Order dated 03.08.2026 passed in IA/ND/4604/2025 in CP(IB)-80/ND/2023 by the Hon'ble National Company Law Tribunal, New Delhi (“Adjudicating Authority”). Assets Care & Reconstruction Enterprise Ltd., who is the Financial Creditor, acting in its capacity as trustee of ACRE-100-TRUST, is the Respondent No.1 herein.  Mr. Anup Kumar, who is the Bankruptcy Trustee of the Appellant is the Respondent No.2 herein.

# 3. The appeal is filed by the Appellant i.e., Manju Sirohi who is a Personal Guarantor of M/s Saha Infratech Private Limited under Section 61 of the Insolvency and Bankruptcy Code, 2016, (“Code”) arising out of Impugned Order dated 20.08.2026 passed by the Hon'ble National Company Law Tribunal (“Adjudicating Authority”) in CP(IB)-80/ND/2023, whereby RA-73/ND/2026 seeking recall of the Order dated 03.08.2026 being being ex-parte Order was dismissed. Assets Care & Reconstruction Enterprise Ltd., who is the Financial Creditor, acting in its capacity as trustee of ACRE-100-TRUST, is the Respondent No.1 herein. Mr. Anup Kumar, who is the Bankruptcy Trustee of the Appellant is the Respondent No.2 herein.

Common Pleadings of the Appellant

# 4. The Appellant submitted that Respondent No. 1 had filed an application under Section 95(1) of the Code, to initiate the insolvency process against her on account of the failure of M/s Saha Infratech Pvt. Ltd. (Corporate Debtor) to repay the debt. The Appellant stated that vide order dated 10.04.2023, the Adjudicating Authority appointed Mr. Anup Kumar as the Resolution Professional in CP(IB)- 80/ND/2023. The Appellant contended that Respondent No. 1 thereafter filed IA- 5276/2024 under Section 123 of the Code seeking initiation of the bankruptcy process against her, and that due to her non-appearance, the Adjudicating Authority initiated ex-parte proceedings by order dated 21.02.2025. 

# 5. The Appellant submitted that on 03.03.2025 and again on 16.03.2025 she sold her personal jewellery in order to sustain herself in Delhi NCR, with the sale proceeds being credited to her personal bank account, and that on 11.03.2025 she received funds transferred from her mother-in-law’s bank account pursuant to its closure. The Appellant contended that on 14.05.2025 the Adjudicating Authority reserved orders in IA-5276/2024, and that on 21.05.2025 the Adjudicating Authority declared her bankrupt under Section 126 of the Code and appointed Respondent No. 2 as the Bankruptcy Trustee under Section 125 of the Code.

# 6. The Appellant submitted that on 11.09.2025, Respondent No. 2 filed IA- 4604/ND/2025 under Regulation 12 of the relevant IBBI Regulations read with Section 186(D) of the Code, seeking, inter alia, directions to the Appellant to submit her complete financial position, to return a sum of Rs. 19,17,500/- forming part of the bankruptcy estate, to furnish details of after-acquired property, and to extend co-operation in the bankruptcy process.

# 7. The Appellant stated that a complete transaction summary of her Union Bank of India account (No. 398502010053816) reveals deposits totalling Rs. 18,92,214.00 comprising Rs. 5,66,966.00 transferred from her mother-in-law’s account on 11.03.2025 and Rs. 13,25,248.00 realised from the sale of gold jewellery and related items on 24.03.2025, against withdrawals totalling Rs. 19,19,500.00 made between 16.06.2025 and 24.07.2025, primarily by selfwithdrawal and ATM.

# 8. The Appellant contended that her counsel, who was recently engaged,  appeared on 03.08.2026 through video conferencing when the Adjudicating Authority disposed of IA-4604/ND/2025 and passed an ex-parte order directing her to pay back Rs. 19,17,500/- to Respondent No. 2. The Appellant submitted that although her counsel was present when the matter was called, an unstable internet connection prevented necessary submissions, resulting in the ex-parte order.

# 9. The Appellant submitted that being aggrieved by the said ex-parte order, she preferred RA-73/ND/2026 under Rule 11 of the NCLT Rules, 2016 seeking its recall. The Appellant stated that on 20.08.2026, the recall application was heard and dismissed by the Adjudicating Authority on the ground that IA- 4604/ND/2025 had been allowed and disposed of on merits and that a recall application was not the appropriate remedy, even though the order dated 03.08.2026 itself recorded that the application was allowed due to the absence of any denial.

# 10. The Appellant submitted that the Adjudicating Authority grossly erred in dismissing the recall application and failed to appreciate that the order dated 03.08.2026 was not passed on merits and was made without affording her an  opportunity of hearing. The Appellant stated that she is a senior citizen residing in Delhi NCR with no source of income, that the sale of her personal jewellery was a last resort to sustain herself, and that she was unaware of the moratorium at the time of the withdrawals.

# 11. The Appellant contended that her personal jewellery constitutes an excluded asset under Section 155(2) of the Code, and that the amounts withdrawn from her savings account represented the sale proceeds of such jewellery together with the sum transferred from her mother-in-law’s account, both of which are excluded assets under Section 79(14) of the Code.

# 12. Concluding arguments, the Appellant requested this Appellate Tribunal to set aside the Impugned Orders and allow the both appeals. 

# 13. Per contra, the Respondent No.2 (Bankruptcy trustee), the contesting Respondent , denied all the averments made by the Appellant as misleading and baseless.

# 14. The Respondent No. 2 stated that in the captioned matter the Personal Insolvency Resolution Process was initiated on 18.01.2024 and, upon nonsubmission of a repayment plan, the Adjudicating Authority passed an order on 02.07.2024 under Section 114 of the Code, directing the financial creditor to file an application against the personal guarantor/Appellant. The Respondent No. 2 contended that the financial creditor thereafter filed an application under Section 123 of the Code, and vide order dated 21.05.2025 the Adjudicating Authority initiated the bankruptcy process against the Appellant and appointed the answering Respondent as the Bankruptcy Trustee to conduct the proceedings in accordance with law.

# 15. The Respondent No. 2 submitted that pursuant to the order dated 21.05.2025, a public announcement was made on 30.05.2025 inviting creditor claims by 06.06.2025, and simultaneous intimation of initiation of the bankruptcy proceedings.

# 16. The Respondent No. 2 stated that pursuant to the public announcement claims were received from two financial creditors and admitted as follows: M/s Assets Care & Reconstruction Enterprises Ltd. claimed Rs. 426,19,59,899/-, of which Rs. 55,06,45,056.52/- was admitted and Rs. 371,13,14,842.48/- was admitted as contingent; M/s IDBI Trusteeship Services Ltd. claimed Rs. 544,33,62,699/- which was admitted entirely as contingent, resulting in a total claim of Rs. 970,53,22,598/-, of which Rs. 55,06,45,056.52/- was admitted and Rs. 915,46,77,541.48/- was admitted as contingent.

# 17. The Respondent No. 2 contended that pursuant to Section 133 of the Code the first meeting of creditors was convened on 01.07.2025, in which the Appellant through her representative participated and assured the Bankruptcy Trustee that the financial statement of the Bankrupt would be submitted as called for in the intimation letter dated 30.05.2025. The Respondent No. 2 submitted that despite the assurance, the Appellant failed to provide the financial statement as called for, whereupon another intimation was sent on 18.07.2025 seeking relevant information; in response the Appellant furnished details of bank accounts and other information.

# 18. The Respondent No. 2 stated that upon receiving the information, the Bankruptcy Trustee collected the bank account statements and instructed the banks to mark debit freeze on all accounts till further instructions. Upon perusal of the statements, it was found that the Appellant had withdrawn a total of Rs. 19,17,500/- between 16.06.2025 and 24.07.2025, the details being: 16.06.2025 – Self – Rs. 9,95,000/-; 21.06.2025 – Self – Rs. 9,00,000/-; 06.07.2025 – ATM – Rs. 10,000/-; 23.07.2025 – ATM – Rs. 10,000/-; 24.07.2025 – ATM – Rs. 1,000/- , Rs. 1,500/-, Rs. 500/- and Rs. 500/-.

# 19. The Respondent No. 2 contended that an application (IA-4604/2025) was filed before the Adjudicating Authority seeking return of the unauthorised withdrawal of Rs. 19,17,500/-. The Appellant appeared on 08.12.2025 but thereafter failed to appear despite notice, compelling the Adjudicating Authority to proceed ex-parte and pass the impugned order dated 03.08.2026 directing return of the said amount. The Appellant’s subsequent recall application (RA- 73/ND/2026) was dismissed by the Adjudicating Authority vide order dated 20.08.2026.

# 20. The Respondent No. 2 submitted that the amount of Rs. 19,17,500/- constitutes an unauthorised withdrawal because, under Section 154 of the Code, 2016, the estate of the bankrupt vests in the Bankruptcy Trustee immediately from the date of appointment without any conveyance, assignment or transfer. The Respondent No. 2 stated that any amount lying in the account of the Bankrupt forms part of the bankruptcy estate under Section 155 of the Code and is to be distributed to the creditors under Section 178 of the Code.

# 21. The Respondent No. 2 contended that the withdrawal is illegal as it was made after due intimation given by the Bankruptcy Trustee vide letter dated 30.05.2025. The Respondent No. 2 further submitted that while the Appellant seeks exclusion of the assets under Section 79(14) of the Code, the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019 prescribe that the value of unencumbered personal ornaments under clause (c) of the said subsection shall not exceed one lakh rupees.

# 22. The Respondent No. 2 stated that the Appellant failed to avail the ample opportunities granted by the Adjudicating Authority and therefore cannot raise the plea at this stage. The Respondent No. 2 contended that the present appeals are without any merit or ground and are liable to be dismissed outright. 

# 23. Concluding the arguments, the Respondent No.2 requested this AppellateTribunal to dismiss both appeals.

Findings

# 24. We have already noted the rival contentions of the parties in preceding paragraphs. The material facts are not in dispute. The Appellant was declared bankrupt on 21.05.2025 and Respondent No. 2 was appointed Bankruptcy Trustee. The Union Bank of India statement of her savings account, filed by both sides and admittedly authentic, shows Rs. 19,07,366.46 at her credit on that date. Between 16.06.2025 and 24.07.2025 the whole of it was drawn out: two Self withdrawals of Rs. 9,95,000.00 and Rs. 9,00,000.00, and six ATM withdrawals totalling Rs. 23,500.00, leaving Rs. 114.32. The Appellant does not deny any withdrawal and her own table lists them. Her defence is one of law and hardship, not of fact.

# 25. It may be stated that the correct test is vesting, not moratorium. The Trustee’s intimation of 30.05.2025 and his application, and the Appellant’s plea of being unaware of the moratorium, all proceed on a wrong label. We observe that Section 128(1)(c) of the code restrains creditors from acting against the bankrupt’s property; it does not regulate the bankrupt. We need to appreciate that the estate, comprising all property belonging to the bankrupt at the commencement date, vests in the Trustee by operation of law, without any conveyance, assignment or transfer. Thus, it is clear that money at credit in a bank account is property and from 21.05.2025, the balance was the Trustee’s to hold, and every withdrawal by the Appellant was a dealing with property that was not hers to deal with.

# 26. We are of clear opinion that the plea of unawareness is no defence to vesting, which does not depend on the bankrupt’s knowledge, and is in any case unproved. It has been brought to our notice that the Trustee’s intimation was delivered to the Appellant on 05.06.2025 , eleven days before the first withdrawal and she was represented at the creditors meeting on 01.07.2025 and further she wrote to the Trustee about her accounts on 22.07.2025, after which the ATM withdrawals of 23–24.07.2025 followed.

# 27. We would like to state that the jewellery sale proceeds of Rs. 13,25,248.00 (69.5 % of the balance) are not excluded assets as Section 155(2)(a) excludes only “excluded assets” as defined in section 79(14) of the code. The Clause (c) protects only unencumbered personal ornaments which cannot be parted with, in accordance with religious usage, of a value not exceeding Rs. 1,00,000/- (Rule 5(a) of the 2019 Bankruptcy Rules). We are not in position to accept the pleadings of the appellant because the proceeds are more than thirteen times the cap prescribed in the regulations. Further the exclusion attaches to described assets, not to money. It has also been brought to our notice that on the commencement date, the Appellant held no ornaments (her Form-E shows jewellery as Nil but a bank balance, which none of clauses (a) to (e) of section 79(14) of the code mentions, and nothing in the Code carries the protected character over to sale proceeds.

# 28. We are of considered opinion that claimed hardship by the Appellant cannot enlarge section 79(14) of the code, which is a closed list. We also do not find any rationale for withdrawal of Rs. 18,95,000/- by the Appellant in five days without explanation.

# 29. We note that the recall application (RA-73/ND/2026) was dismissed. It needs to be appreciated that recall is not a matter of right. The Appellant’s case that her counsel could not be heard on 03.08.2026 for want of connectivity is not supported by any record. We have noted that notice had been served to the Appellant on 22.09.2025 and no reply had been filed for over ten months. Even on the Appellant’s version, no prejudice is shown. Thus, we do not find any meritin the contents of the appellant regarding denial of recall application by the Adjudicating authority.

# 30. Based on the above analysis, we do not find any merit in either of the appeals. The appeals fail and stand rejected. No order as to cost. IA, if any, stands closed.

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Mavjibhai Nagarbhai Patel vs State Bank of India and Ors. - Since the guarantee deed specifically mentioned that the guarantee was in the nature of an on-demand guarantee, the default was to arise on the part of the Guarantor only when the Demand Notice was issued as contemplated in the Deed of Guarantee. Thus, the period of limitation of the Personal Guarantor was to commence once the demand was made on the Guarantor by the Respondent No.1 Bank. Hence, the Notice dated 04.06.2021 issued by the Respondent No.1 Bank to the Personal Guarantor has to be treated to be Notice on Demand as contemplated in the Deed of Guarantee.

 NCLAT (2024.12.18) in Mavjibhai Nagarbhai Patel vs State Bank of India and Ors. [(2024) ibclaw.in 841 NCLAT, Company Appeal (AT) (Insolvency) No. 1702 of 2024 & Others] held that; 

• There can be default by the Principal Borrower and the Guarantor on the same date or date of default for both may be different depending on the terms of contract of guarantee. It is well settled that the loan agreement with the Principal Borrower and the Bank as well as Deed of Guarantee between the Bank and the Guarantor are two different transactions and the Guarantor’s liability has to be read from the Deed of Guarantee.

• Since the guarantee deed specifically mentioned that the guarantee was in the nature of an on-demand guarantee, the default was to arise on the part of the Guarantor only when the Demand Notice was issued as contemplated in the Deed of Guarantee. Thus, the period of limitation of the Personal Guarantor was to commence once the demand was made on the Guarantor by the Respondent No.1 Bank. Hence, the Notice dated 04.06.2021 issued by the Respondent No.1 Bank to the Personal Guarantor has to be treated to be Notice on Demand as contemplated in the Deed of Guarantee.

 

Excerpts of the Order; 

The present appeal filed under Section 61(1) of Insolvency and Bankruptcy Code 2016 (‘IBC’ in short) by the Appellant arises out of the Order dated 27.06.2024 (hereinafter referred to as ‘Impugned Order’) passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench-I) in C.P/IB/205/AHM/2022, C.P/IB/206/AHM/2022 and C.P/IB/215/AHM/2022 respectively. By the impugned order, the Adjudicating Authority has admitted the application filed by the Respondent No.1- State Bank of India under Section 95(1) of IBC initiating insolvency resolution process of the Appellant- Mavjibhai Nagarbhai Patel being the Personal Guarantor of the Corporate Debtor. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant.

 

# 2. The significant dates and sequence of events which require to be noticed for deciding the matter at hand are as placed below:

• The Corporate Debtor-Vrundavan Ceramic Pvt. Ltd. had been sanctioned loan facilities by the Respondent No.1- Bank. The Personal Guarantor-Appellant had executed a Deed of Guarantee dated 09.04.2005 followed by Supplemental Deeds of Guarantees until 2010 in respect of credit facilities extended by the Respondent No. 1-Bank to the Corporate Debtor.

• The Loan Account of the Corporate Debtor was declared as Non- Performing Asset (“NPA” in short) on 31.07.2013 and recalled by the Respondent No. 1-Bank due to failure to repay as per schedule of payment. The Financial Creditor-Respondent No.1-Bank had filed a Section 7 application under the IBC against the Corporate Debtor.

• The Corporate Debtor was admitted into Corporate Insolvency Regulation Process (“CIRP” in short) on 21.01.2020.

• Demand Notice dated 04.06.2021 under Section 13(2) of SARFAESI Act was issued by the Respondent No. 1 Bank calling upon the Borrowers and the Guarantors to make the outstanding payment amounting to Rs 32.60 Cr. This Demand Notice dated 04.06.2021 notified repayment of debt by 04.08.2021 by the Appellant-Personal Guarantor also.

• The Respondent No. 1 Bank issued a Rule 7(1) Demand Notice of the Insolvency and Bankruptcy (Application to Adjudicating Authority for initiation of Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, (hereinafter refer to as “the said Rules”) under Section 95 of the IBC on the Appellant-Personal Guarantor on 28.09.2021.

• The Respondent No.1 Bank, not having received repayment of debt proceeded to file Section 95 application against the Appellant-Personal Guarantor on 18.06.2022.

• The Adjudicating Authority appointed the Resolution Professional (“RP” in short) to carry out the insolvency resolution process of the Personal Guarantor and with direction to send report under section 99 of the IBC.

• The RP recommended the admission of the application filed under Section 95 of the IBC.

• The Adjudicating Authority thereafter vide impugned order ordered the initiation of insolvency resolution process of the Personal Guarantor.

• Aggrieved by the impugned order, the present appeal has been preferred by the Personal Guarantor.

 

# 3. Two similar appeals have been filed by Narayanbhai N. Patel vide Company Appeal No. 1712 of 2024 and by Jayantibhai Nagarbhai Patel vide Company Appeal No. 1711 of 2024. The appeal filed by Narayanbhai N. Patel is against impugned order dated 27.06.2024 in CP(IB) No. 215/AHM of 2022 while the appeal filed by Jayantibhai Nagarbhai Patel is against impugned order dated 27.06.2024 in CP(IB) No. 206/AHM of 2022. In both these appeals, the above two Appellants have assailed the impugned order admitting the Section 95(1) applications filed by the Respondent No.1- State Bank of India allowing initiation of their insolvency resolution process. Since, the grounds on which the Section 95 application has been admitted by the Adjudicating Authority in these two cases are predicated on the same facts and grounds as in the case of Mavjibhai Nagarbhai Patel, we have chosen to confine ourselves to the pleadings made in Company Appeal No. 1702 of 2024 to decide these three Appeals at hand.

 

# 4. Making his submissions, the Learned Counsel for the Appellant- Personal Guarantor stated that the Adjudicating Authority had erroneously passed the impugned order allowing the Section 95 application even though it was badly time-barred. Since the date of default mentioned by the Respondent No.1 Bank in Form-C of the Section 95 application is 31.07.2013, the three- year period of limitation expired in 2016. Hence, the application under Section 95 of IBC filed in June 2022 by the Respondent No.1 Bank seeking insolvency resolution of the Appellant was grossly time-barred. Submission was pressed by the Appellant that the Respondent No. 1 had relied on a letter dated 11.01.2022 to claim that the Section 95 application was filed within the limitation period. It was pointed out that when the three-year period of limitation stood expired in 2016, the letter of 11.01.2022 could not have revived or extended the limitation period since any acknowledgment of debt made after expiry of the limitation period does not have the effect of extending the limitation period.

 

# 5. It was strenuously contended that even the claim made by the Respondent No.1 Bank that the debt qua the personal guarantor was due on 04.06.2021 being the date of Demand Notice under Section 13(2) of the SARFAESI Act is frivolous as the Section 95 application filed by the Respondent No.1 Bank states the date of default qua the Appellant to be 31.07.2013. Thus, the date of default in the Section 95 application is sacrosanct and cannot be changed by the Respondent No.1 Bank at its own will and fancy to suit its convenience.

 

# 6. It is also asserted that the Adjudicating Authority in the impugned order has wrongly relied on two revival letters dated 30.12.2015 and 31.03.2017 to hold that the Corporate Debtor and the Personal Guarantor had signed and confirmed the balance confirmation in these letters and in treating these letters as letters of acknowledgement of liability by the Appellant. Denying that these letters were never signed by the Appellant it cannot be viewed as admission of their liability. It was further submitted that though these two letters figure in the impugned order, these letters are actually non-existent. To substantiate their argument, it is stated that these letters have neither been placed on record with the application under Section 95 filed by Respondent No. 1 nor do the letters figure in the report of Respondent No.2-RP. It has been vehemently contended by the Ld. Counsel for the Appellant that the impugned order therefore wrongly relied on the non-existent letters dated 30.12.2015 and 31.03.2017 to claim that the Section 95 application is filed within the limitation period.

 

# 7. The second limb of argument of the Appellant is that the application under Section 95 was defective as it has been signed and filed by an Assistant General Manager (“AGM” in short) of the Respondent No. 1 Bank and therefore not instituted by any authorised person. It was stated that as per Form-C of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, (hereinafter refer to as “the said Rules”) any person authorized to act on behalf of the Creditor is required to enclose the authorization document in that regard. It was submitted that the Adjudicating Authority failed to consider that the Section 95 application did not disclose the authority under which the AGM had signed the application on behalf of the Respondent No.1 Bank. The stand-alone purported Authority Letter signed by a Deputy General Manager in favour of an AGM without the backing of a resolution by the Central Board of Directors of the Respondent No.1 Bank in favour of the said signatory was not sufficient to meet the criteria of disclosure of authorisation as required under Form-C of the said rules. Since this was not a valid authorization, the application under Section 95 was defective and liable to be dismissed on this ground alone.

 

# 8. Refuting the contentions made by the Appellant, the Ld Counsels for the Respondents submitted that the Personal Guarantor-Appellant had executed a Deed of Guarantee dated 09.04.2005 followed by Supplemental Deeds of Guarantees in respect of credit facilities extended by the Respondent No. 1- Bank to the Corporate Debtor. The clauses of the Deed of Guarantee clearly stated that the guarantee was in the nature of a continuing guarantee and the date of default would be as stipulated in the Deed of Guarantee. In the present case, the Personal Guarantee was invoked by the Respondent No.1 Bank through Demand Notice dated 04.06.2021 under Section 13(2) of the SARFAESI Act which called upon both the Borrowers and the Guarantors to make payment of the amount of Rs 32.60 Cr. within 60 days. As the Personal Guarantor did not make the payment as demanded in the Demand Notice dated 04.06.2021, the Respondent No. 1 Bank issued Demand Notice dated 28.09.2021 under Rule 7(1) of the said rules. Since the Appellant-Personal Guarantor did not repay the debt within 14 days from Rule 7(1) Notice, the Respondent No.1 proceeded to file the Section 95 application on 18.06.2022 which was within the limitation period as Personal Guarantee had been invoked by demand notice dated 04.06.2021.

 

# 9. On the plea raised by the Appellant that the Section 95 application was not filed by a person competent to do so, this argument was strongly rebutted by the Ld. Counsel for Respondent No.1 Bank by contending that the Authority Letter authorising the AGM to file the Section 95 application was signed by the Deputy General Manager in terms of Gazette Notification dated 02.05.1987 issued in pursuance of Regulations 76(1) of the State Bank of India General Regulations, 1955 framed under Section 50 of the State Bank of India Act, 1955. Hence the contention of the Appellant that the Section 95 application was filed by an unauthorized person is not a valid submission and lacks merit.

 

# 10. We have duly considered the arguments advanced by the Learned Counsel for both the parties and perused the records carefully.

 

# 11. The two short issues for consideration are whether the Section 95 application filed by the Respondent No. 1 Bank was time-barred or not and whether the Section 95 application was filed by a duly authorized person.

 

# 12. It is the case of the Appellant that the stand taken by the Respondent No.1 that the date of default was 04.06.2021 as shown in the notice under Section 13(2) of the SARFAESI Act cannot be accepted in view of the fact that the Respondent No.1 Bank has held the date of default qua the Corporate Debtor-Guarantors to be 31.06.2013. Hence, the Respondent No.1 Bank cannot read the date of default on the part of the Personal Guarantor to be 04.06.2021 at a time when the date of default on the part of the Corporate Debtor was 31.07.2013.

 

# 13. Before we dwell upon the issues delineated by us at para 11 above, at the very outset, we would like to advert attention to the judgement of this Tribunal in Pooja Ramesh Singh Vs. State Bank of India in CA(AT) (Insolvency) No.329 of 2023 wherein it has been held that the liability of a borrower and guarantor is co-extensive but the liability of a Guarantor stems from the contract of guarantee and therefore the date of default in the case of the guarantor depends on the terms of contract of guarantee. The date of default for the principal borrower and the guarantor can be different depending on the terms of the Contract of Guarantee in terms of this judgment. The relevant excerpts of the judgment are extracted as below:

• 24. The scheme of I&B Code clearly indicate that both the Principal Borrower and the Guarantor become liable to pay the amount when the default is committed. When default is committed by the Principal Borrower the amount becomes due not only against the Principal Borrower but also against the Corporate Guarantor, which is the scheme of the I&B Code. When we read with as is delineated by Section 3(11) of the Code, debt becomes due both on Principal Borrower and the Guarantor, as noted above. The definition of default under Section 3(12) in addition to expression ‘due’ occurring in Section 3(11) uses two additional expressions i.e. “payable” and “is not paid by the debtor or corporate debtor”. The expression ‘is not paid by the debtor’ has to be given some meaning. As laid down by the Hon’ble Supreme Court in “Syndicate Bank vs. Channaveerappa Beleri & Ors.” (supra), a guarantor’s liability depends on terms of his contract. There can be default by the Principal Borrower and the Guarantor on the same date or date of default for both may be different depending on the terms of contract of guarantee. It is well settled that the loan agreement with the Principal Borrower and the Bank as well as Deed of Guarantee between the Bank and the Guarantor are two different transactions and the Guarantor’s liability has to be read from the Deed of Guarantee. (Emphasis supplied) 

 

# 14. In the present factual matrix, it is an undisputed fact that the Personal Guarantor-Appellant had executed a Deed of Guarantee dated 09.04.2005 followed by Supplemental Deeds of Guarantees until 2010 in respect of credit facilities extended by the Respondent No. 1- Bank to the Corporate Debtor. It may therefore be relevant to peruse the guarantee deed to find out the treatment of date of default in respect of the Guarantors.

 

# 15. When we look at the relevant clauses of the guarantee deed, we notice that the clauses spell out the co-extensive liability of the principal borrower and the guarantor qua the credit facility extended by the Respondent No.1 Bank as well as the event of default which are as reproduced below:

• “6. The Guarantee herein contained shall be enforceable against the Guarantors notwithstanding the securities aforesaid or any other collateral securities that the Bank may have obtained or may obtain from the Borrower or any other person shall at the time when proceedings are taken against the Guarantors hereunder be outstanding and/or not enforce and or remain unrealised.

• 7. In order to give effect to the Guarantee herein contained the Bank shall be entitled to act as if the Guarantors were principal debtors to the Bank for all payments guaranteed by them as aforesaid to the Bank.

• 8. The guarantee herein contained is a continuing one for all amounts advanced by the Bank to the Borrower in respect of or under the aforesaid credit facilities as also for all costs and other monies which may from time to time become due and remain unpaid to the Bank thereunder.…

• 12. The Guarantors affirm confirm and declare that any balance confirmation and/or acknowledgment of debt and/or admission of liability given or promise or part payment made by the Borrower or the authorised agent of the Borrower to the Bank shall be deemed to have been made and/or given by or on behalf of the Guarantors themselves and shall be binding upon each of them.

• 13. The Guarantors shall forthwith on demand made by the Bank deposit with the Bank such sum or security or further sum or security as the Bank may from time to time specify as security for the due fulfillment of their obligations under this Guarantee….

• 20. The Guarantors agree that amount due under or in respect of the aforesaid credit facilities and hereby guaranteed shall be payable to the Bank on the Bank serving the Guarantors with a notice requiring payment of the amount …” (Emphasis supplied) 

 

# 16. The liability of the guarantor has to be read from the Deed of Guarantee. Further, the terms of the Deed of Guarantee are extremely material as the invocation of the guarantee was to be purely in accordance with the terms of guarantee. Having looked at the relevant clauses of the Deed of Guarantee in the preceding paragraph, we are of the considered view that the Deed of Guarantee entered between the Respondent No.1 Bank and Personal Guarantor is an independent, distinct and a special contract which has to be construed on its own terms. It is clear from the reading of the clauses in the Deed of Guarantee that guarantee was given by the Personal Guarantor in unequivocal terms and the guarantee amount was to be paid by the guarantor once the guarantee was invoked.

 

# 17. When we look at the specific Clauses of the Deed of Guarantee, it clearly states that the guarantee was in the nature of a continuing guarantee. The Guarantor had agreed that any admission on acknowledgement in writing signed by the Borrower shall also be binding on the Guarantor. Further, the Guarantor had agreed that the amount due under or in respect of the credit facilities to be payable to the creditor bank will be payable by the guarantor on a notice requiring payment of the amount.

 

# 18. In the present case, after the Corporate Debtor was admitted into CIRP on 21.01.2020 and the Personal Guarantee was invoked by the Respondent No.1 Bank through Demand Notice dated 04.06.2021 under Section 13(2) of the SARFAESI Act which called upon both the Borrowers and the Guarantors to make payment of the amount of Rs 32.60 Cr. as on 30.04.2021 within 60 days. The Section 13(2) Notice which was sent to the Corporate Debtor was also forwarded to the Guarantor with the specific demand to make payment of the amount mentioned in the notice in terms of the guarantee. This Section 13(2) Notice was indisputably also sent to the Personal Guarantors separately and independently. When we see the Section 13(2) notice under SARFAESI Act as placed at pages 549 to 551 of Appeal Paper Book (“APB” in short) we find that there is clear indication of the names of all the Personal Guarantors therein which includes the present Appellant (and also the other two Appellants whose appeals are also under consideration before us). Para 11 of the Section 13(2) SARFAESI addressed to the Corporate Debtor notice which was also forwarded to the personal guarantors including the Appellant is relevant to be noticed which is as extracted below:

• “11. Further we are also forwarding the copy of this notice to personal guarantor who are liable to pay the aforesaid outstanding amount. This notice is without prejudice to the Bank’s right to initiate such other actions or legal proceedings as it deems necessary under any other applicable provisions of Law. This notice is in supersession of our earlier notices sent to you vide our letter no. SAMB/GRJ/2018-19/2002 dated 16.02.2019 which stands withdrawn.

• XXXX

• You are requested to make the payment of the amount mentioned in the notice in terms of the guarantees executed by you.” (Emphasis supplied) 

 

# 19. The Appellant-Personal Guarantor did not make the payment as demanded by the Section 13(2) Notice dated 04.06.2021. Thereafter, the Respondent No. 1 Bank issued Demand Notice dated 28.09.2021 under Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for initiation of Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 as below: . . . . .

The above Demand Notice under Rule 7(1) clearly stipulated that the debt was due on 04.06.2021 being the date of Demand Notice under Section 13(2) of the SARFAESI Act. The date of default in the Rule 7(1) notice was clearly shown as 04.08.2021 being 60 days from 04.06.2021. The Section 13(2) Notice was also attached with the Rule 7(1) Notice.

 

# 20. Since the guarantee deed specifically mentioned that the guarantee was in the nature of an on-demand guarantee, the default was to arise on the part of the Guarantor only when the Demand Notice was issued as contemplated in the Deed of Guarantee. Thus, the period of limitation of the Personal Guarantor was to commence once the demand was made on the Guarantor by the Respondent No.1 Bank. Hence, the Notice dated 04.06.2021 issued by the Respondent No.1 Bank to the Personal Guarantor has to be treated to be Notice on Demand as contemplated in the Deed of Guarantee. The Rule 7(1) Notice dated 28.06.2021 had therefore rightly recorded that the debt was due on 04.06.2021 being the date of Demand Notice under Section 13(2) of the SARFAESI Act and that the date of default occurred on 04.08.2021 on the expiry of 60 days from 04.06.2021.

 

# 21. Further, when we look at the Form-C of Section 95 application filed by Respondent No. 1 Bank, we find that the date of default in respect of the Personal Guarantor has been explained in Part-II at column No. 4 as follows:

• “On 28.9.2021, Demand Notice was issued under section 95(4)(b) of the IB Code 2016, read with rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personnel Guarantors to Corporate Persons) Rules, 2019 on the Respondent- personal guarantors demanding the Payment of the unpaid debt in default amounting to Rs. 33,51,62,406.00/- which was successfully severed to respondent- personal guarantor.”

We also find that the Section 95 application shows that the Respondent No.1 Bank besides relying on the Demand Notice dated 04.06.2021 also relied on other documents and guarantees including the Rule 7(1) Demand Notice; Deed of Guarantee dated 09.04.2005; Demand Notice dated 04.06.2021; Settlement Proposal dated 11.01.2022 etc.

 

# 22. Given this backdrop, to answer the first question before us, the Section 95 petition which was filed on 18.06.2022 was very much within the limitation period since the Personal Guarantee had been invoked on 04.06.2021 and demand qua the Personal Guarantor arose on the expiry of the period specified in the Demand Notice. When the Respondent No.1 Bank has given time to the Guarantor to make payment by 04.08.2021 in terms of the Notice dated 04.06.2021, there can be no default on the part of the Guarantor on any earlier date.

 

# 23. This brings us to the second question on whether the Section 95 application has been validly filed. It is an admitted fact that the Authority Letter authorising the AGM to file the Section 95 application was signed by the Deputy General Manager. It was clarified by the Ld. Counsel for the Respondent No.1 Bank during the oral submissions that the AGM of the Respondent No1 Bank being SMGS-V was statutorily competent to sign any petition by virtue of The Gazette of India Notification dated 02.05.1987 which notified that in pursuance of Regulations 76(1) of the State Bank of India General Regulations, 1955 framed under Section 50 of the State Bank of India Act, 1955 the Executive Committee of the Central Board of the State Bank of India authorized all Officers in the Grade of SMGS-IV and above to exercise Signing Power in respect of documents connected with the current or authorized business of the Bank. Since the Gazette of India Notification lies in the public domain and is subsisting, we are not impressed by the plea raised by the Appellant that the Section 95 application signed by an AGM level Officer of the Respondent No.1 Bank to be unauthorized. Thus, to reply to the second question, we are of the considered view that the Section 95 application filed by the Respondent No.1 Bank is valid and therefore reject this technical plea raised by the Appellant.

 

# 24. For the forgoing reasons, we are of the considered opinion that all the three impugned orders therefore do not warrant any interference. The Appeals filed by all the three Appellants are devoid of merit and therefore dismissed. No costs.

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Kamlesh Rani Singla vs Praveen Kumar Garg - We also note that the Transfer Application specifically raised a threshold and objection of jurisdiction, contending that proceedings under Section 95 IBC against a Personal Guarantor cannot be maintained before NCLT New Delhi when the CIRP of the Corporate Debtor is pending before NCLT Chandigarh, which alone has exclusive territorial and subject-matter jurisdiction under Section 60(2) of the Code.

 NCLAT (20126.09.09) in Kamlesh Rani Singla vs Praveen Kumar Garg [(2026) ibclaw.in 1034 NCLAT, Company Appeal (AT) (Insolvency) No. 275 of 2026] held that; 

• We also note that the Transfer Application specifically raised a threshold and objection of jurisdiction, contending that proceedings under Section 95 IBC against a Personal Guarantor cannot be maintained before NCLT New Delhi when the CIRP of the Corporate Debtor is pending before NCLT Chandigarh, which alone has exclusive territorial and subject-matter jurisdiction under Section 60(2) of the Code.

• In this case we find that the proceedings against the Corporate Debtor were going on in NCLT Chandigarh in one of the benches and simultaneously proceedings against the personal guarantor have been initiated in NCLT Delhi in another bench. It would have been appropriate that this application should have been dismissed as non-maintainable at the stage of the admission itself and the applicant should have been advised to file it before the appropriate bench, that is in Chandigarh.

Excerpts of the Order; 

The present Appeal of the Suspended Director cum Personal Guarantor of the Corporate Debtor, has been preferred involving Section 421 of the Companies Act, 2013 (hereinafter referred as “the Act”) against the order dated 05.12.2025 (hereinafter referred to as the “Impugned Order”) passed by Ld. National Company Law Tribunal, New Delhi, Single Principal Bench in TA(IBC)-50(PB)/2024, arising out of CP(IB) No. 419/ND/2023, titled “Praveen Kumar Garg v. Kamlesh Rani Singla”. By way of the Impugned Order dated 05.12.2025, the Ld. Principal Bench has:

• i) Dismissed T.A. (IBC) No. 50 (PB)/2024, filed under Rule 16(d) of the National Company Law Tribunal Rules, 2016 read with Sections 61(1) and 61(2) of the Insolvency and Bankruptcy Code, 2016 and Rule 11 of the NCLT Rules, 2016, seeking transfer of C.P. (IB) No. 419/ND/2023, titled “Praveen Kumar Garg v. Kamlesh Rani Singla”, from the Hon’ble NCLT, New Delhi Bench-II to the Hon’ble NCLT, Chandigarh Bench (Court-II); and

• ii) Closed the said transfer application by placing reliance upon the order dated 16.10.2025 passed by the Hon’ble Gujarat High Court in R/Special Civil Application No. 11679 of 2024,

Submissions of the Appellant

# 2. The Appellant submits that, this Appellate Tribunal is empowered under Section 421 of the Companies Act, 2013 to entertain and adjudicate the present Appeal against the impugned order dated 05.12.2025. It argued that in addition to the statutory appellate jurisdiction, this Hon’ble Tribunal also possesses inherent powers bestowed on it under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016, which enables to exercise inherent powers and to pass such orders as may be necessary for the proper adjudication of the matter and for securing the ends of justice.

# 3. The present Appeal is not barred by limitation and has been filed within the period prescribed under Section 421(3) of the Companies Act, 2013. The cause of action to prefer the present Appeal arose upon the passing of the Impugned Order on 05.12.2025, and the Appellant has approached this Hon’ble Tribunal within the statutory timeline of 45 days. Accordingly, the Appeal is well within limitation.

# 4. M/s. Laxmi Pipes Ltd., a company incorporated under the provisions of the Companies Act, having its registered office at Bhiwani Road, Hansi, District Hisar, Haryana-125033, is presently undergoing Corporate Insolvency Resolution Process (CIRP). The affairs of the Corporate Debtor are presently being managed through its Resolution Professional appointed pursuant to initiation of CIRP. The CIRP of Laxmi Pipes Ltd. is pending adjudication before the Hon’ble National Company Law Tribunal, Chandigarh Bench-II, in CP (IB) No. 107/Chd/Hry/2023, titled “Praveen Kumar Garg v. Laxmi Pipes Ltd.”, which was admitted by an order dated 17.05.2023 under Section 9 of the Insolvency and Bankruptcy Code, 2016. Mr. Deepak Thukral was appointed as the Interim Resolution Professional, a moratorium under Section 14 IBC was declared, and the Corporate Debtor admitted an operational debt of ₹1,14,27,112/- payable to the Respondent No.1.

# 5. Apart from the above proceedings, Respondent No.1 (Praveen Kumar Garg, Proprietor of M/s GSV Products) filed CP(IB) No. 419/ND/2023 invoking Section 95 of IBC against Appellant (Personal Guarantor/Suspended Director) before NCLT New Delhi Bench II, triggering mandatory transfer jurisdiction u/s 60(2) IBC. Respondent No. 1 initiated proceedings under Section 95 of the Code against the Appellant in his alleged capacity as Personal Guarantor and Suspended Director before the Hon’ble National Company Law Tribunal, New Delhi, Bench-II, instead of filing the same before the Hon’ble National Company Law Tribunal, Chandigarh Bench. The aforesaid proceedings were initiated deliberately and with full knowledge of the fact that the Respondent No. 1 had already instituted proceedings against the Corporate Debtor before the Hon’ble NCLT, Chandigarh Bench vide in shape of CP (IB) No. 107/Chd/Hry/2023, Chandigarh Bench-II, titled Praveen Kumar Garg v. Laxmi Pipes Ltd., which stood admitted on 28.05.2024, and wherein Mr. Gautam Singhal was appointed as the Resolution Professional.

# 6. The pendency and admission of the Corporate Insolvency Resolution Process of the Corporate Debtor before the Hon’ble NCLT, Chandigarh Bench crystallised exclusive territorial and subject-matter jurisdiction in terms of Section 60(2) of the Insolvency and Bankruptcy Code, 2016. Consequently, the initiation and continuation of the proceedings under Section 95 IBC before the Hon’ble NCLT, New Delhi, Bench-II are without jurisdiction, and void ab initio, thus the said proceedings are liable to be transferred to the Hon’ble NCLT, Chandigarh Bench in accordance with law.

# 7. Further, by order dated 28.05.2024, the Hon’ble NCLT, New Delhi, Bench-II, admitted CP (IB) No. 419/ND/2023 under Section 95 IBC, appointed Mr. Gautam Singhal (IBBI/IPA-001/IP-P01437/2018-2019/12240) as the Resolution Professional, and thereby triggered an interim moratorium under Section 96 IBC, resulting into an initiation of parallel insolvency proceedings arising out of the same debt and transaction. Being aggrieved the Appellant filed Transfer Application No. T.A. (IBC)-50 (PB) of 2024 on 08.07.2024, before the Hon’ble NCLT, Principal Bench, seeking transfer of CP (IB) No. 419/ND/2023 to the Hon’ble NCLT, Chandigarh Bench-II, under Section 60(1) and (2) IBC read with Rule 16(d) of the NCLT Rules, 2016, to cure the inherent jurisdictional defect. The said Transfer Application specifically raised a threshold and incurable objection of jurisdiction, contending that proceedings under Section 95 IBC against a Personal Guarantor cannot be maintained before NCLT New Delhi particularly when the CIRP of the Corporate Debtor is pending before NCLT Chandigarh, which alone has exclusive territorial and subject-matter jurisdiction under Section 60(2) of the Code. Thereafter, on 05.12.2025, the Ld. Principal Bench dismissed T.A. (IBC)-50 (PB) of 2024 titled as “Kamlesh Rani Singla Vs. Praveen Kumar Garg” by way of the Impugned Order, without granting the Appellant an effective opportunity of hearing on the jurisdictional issue, and refused to order transfer of CP (IB) No. 419/ND/2023, NCLT-II, to the Hon’ble NCLT, Chandigarh Bench-II.

# 8. While dismissing the Transfer Application of the Appellant, the Ld. Adjudicating Authority has erroneously placed reliance upon the judgment dated 16.10.2025 passed by the Hon’ble High Court of Gujarat in R/Special Civil Application No. 11679 of 2024, titled Arcelor Mittal Nippon Steel India Limited v. National Company Law Tribunal & Ors. [(2025) ibclaw.in 4821 HC], and has, on that premise, misconstrued the scope of Rule 16(d) of the National Company Law Tribunal Rules, 2016 as being confined only to intra-territorial transfers, thereby completely disregarding and rendering otiose the overriding, mandatory and special jurisdictional command contained in Section 60(2) of the Insolvency and Bankruptcy Code, 2016, which obligates that all insolvency proceedings in respect of a Corporate Debtor and its corporate guarantor must be heard by the same Ld. Adjudicating Authority (Bench) having jurisdiction over the Corporate Debtor. Section 60(2) of the Insolvency and Bankruptcy Code, 2016, in clear and mandatory terms, provides that where a CIRP or liquidation proceeding of a Corporate Debtor is pending before a particular Bench of the NCLT, any application relating to the insolvency resolution or bankruptcy of the Personal Guarantor of such Corporate Debtor shall be filed before the same Bench. The legislative intent is to ensure consolidation of proceedings, judicial consistency, and avoidance of conflicting decisions. In view of the aforesaid overriding statutory mandate under Section 60(2) of the Insolvency and Bankruptcy Code, 2016, the Hon’ble NCLT, New Delhi, lacks both territorial jurisdiction as well as inherent jurisdiction to entertain or proceed with the Section 95 application against the Appellant, and any continuation of such proceedings would be void ab initio, coram non judice, without jurisdiction, and wholly unsustainable in law.

# 9. The issue raised in the present appeal is covered by the judgment of this Hon’ble Appellate Tribunal in Company Appeal (AT) (Insolvency) No. 58 of 2023, Ankit Miglani v. State Bank of India [(2023) ibclaw.in 292 NCLAT], decided on 19.04.2023, wherein this Hon’ble Tribunal, after an exhaustive consideration of the scheme and scope of Section 60(1), (2) and (3) of the Insolvency and Bankruptcy Code, 2016, has categorically held that Section 60(2) of the Code is mandatory in nature and admits of no discretion. It has been unequivocally laid down that where a Corporate Insolvency Resolution Process of the Corporate Debtor is pending before a particular Bench of the National Company Law Tribunal, any application relating to the insolvency resolution or bankruptcy of the Personal Guarantor of such Corporate Debtor must necessarily be instituted before the same Ld. Adjudicating Authority (Bench), and not before any other Bench. The Hon’ble Appellate Tribunal has further clarified that the legislative intent behind Section 60(2) IBC is to ensure consolidation of proceedings, judicial consistency, and avoidance of parallel or conflicting decisions by different Benches of the NCLT, and that assumption of jurisdiction by any other Bench, in the absence of a pending CIRP before it, constitutes a patent lack of territorial jurisdiction. Applying the said binding ratio, once the CIRP of the Corporate Debtor is admittedly pending before the Hon’ble NCLT, Chandigarh Bench-II, the initiation and continuation of proceedings under Section 95 IBC against the Appellant before the Hon’ble NCLT, Bench-II, New Delhi are wholly without jurisdiction, non-est in law, and is liable to be transferred. The Impugned Order, therefore, runs directly contrary to the settled law laid down by this Hon’ble Appellate Tribunal and warrants interference on this ground alone.

# 10. In the aforesaid circumstances, the impugned order dated 05.12.2025 is illegal, perverse, and unsustainable in law. Consequently, C.P. (IB) No. 419/ND/2023 pending before the Hon’ble NCLT, New Delhi Bench-II is liable to be transferred to the Hon’ble NCLT, Chandigarh Bench-II, being the sole jurisdictional Adjudicating Authority, under Section 60(2) of the Insolvency and Bankruptcy Code, 2016. The present Appeal is, therefore, being preferred. The present Appeal, therefore, deserves to be allowed, the Impugned Order set aside, and CP (IB) No. 419/ND/2023 be transferred to the Hon’ble NCLT, Chandigarh Bench, being the sole competent Ld. Adjudicating Authority (Bench), in the interest of justice.

Reliefs Sought

# 11. In view of the facts and grounds stated above, it is most respectfully prayed that this Hon’ble Appellate Tribunal may be pleased to:

(a) Set aside the Impugned Order dated 05.12.2025 passed by the NCLT, New Delhi Single Principal Bench in TA(IBC) – 50(PB) / 2024.

(b) Allow TA(IBC) – 50(PB) / 2024 titled as “Kamlesh Rani Singla Vs. Praveen Kumar Garg” and transfer CP(IB) No. 419/ND/2023, titled as Praveen Kumar Garg Proprietor of M/S GSV Products Vs. Kamlesh Rani Singla from NCLT New Delhi Bench II to NCLT Chandigarh Bench-II under Section 60(2) IBC read with Rule 16(d) NCLT Rules.

(c) Quash and set aside all proceedings undertaken before the Hon’ble National Company Law Tribunal, New Delhi in CP (IB) No. 419/ND/2023 pursuant to and subsequent to the admission order dated 28.05.2024, and direct that the said proceedings shall remain in abeyance and stand transferred to the Hon’ble National Company Law Tribunal, Chandigarh Bench-II, being the competent and jurisdictional Adjudicating Authority under Section 60(2) of the Insolvency and Bankruptcy Code, 2016.

(d) Pass such other order(s) as this Hon’ble Tribunal may deem fit and proper in the interest of justice.

Issues for consideration:

• Whether the Hon’ble National Company Law Tribunal, New Delhi, Bench-II, could exercise jurisdiction over proceedings initiated under Section 95 of the Insolvency and Bankruptcy Code, 2016 against a Personal Guarantor, when the Corporate Insolvency Resolution Process of the Corporate Debtor is admittedly pending prior in time before the Hon’ble NCLT, Chandigarh Bench-II?

• Whether the dismissal of T.A. (IBC) No. 50 (PB) of 2024 by the Ld. Principal Bench, New Delhi, without affording the Appellant an effective and meaningful opportunity of hearing on the foundational objection of lack of jurisdiction under Section 60(2) of the Insolvency and Bankruptcy Code, 2016, amounts to a violation of the principles of natural justice which is basic essence of adjudication, thereby vitiating the impugned order and rendering it legally unsustainable?

• Whether the judgment of the Hon’ble Gujarat High Court dated 16.10.2025 passed in R/SCA No.11679 of 2024, rendered in the context of administrative transfers, is applicable to, or can govern, judicial transfer applications seeking correction of an inherent and incurable statutory jurisdictional defect under Section 60(2) of the Insolvency and Bankruptcy Code, 2016?

Appraisal

# 12. The Ld. Adjudicating Authority has dismissed the transfer application, solely relying on the order dated 16.10.2025 passed by the Hon’ble High Court of Gujarat in R/Special Civil Application No. 11679 of 2024. The relevant portion of that order is extracted below:

• “[16] On a perusal of Rule 16(d) of the NCLT Rules, 2016, it becomes clear that the Rule defines the powers and functions of the President, Registrar, and Secretary. Under this provision, the President has the authority to transfer cases from one Bench to another within the same Tribunal when circumstances so require. However, the Rule does not confer any power to transfer a case beyond the territorial jurisdiction of a particular Bench. In other words, the President’s authority to transfer matters is confined to Benches falling within the same territorial limits.

In the present case, the NCLT, New Delhi, while acting on the administrative side, has committed a serious error by transferring the cases from the NCLT, Ahmedabad, to the NCLT, Mumbai. The President of the NCLT has no administrative power to alter or extend the territorial jurisdiction of any Bench. Such an administrative decision directly affecting pending judicial proceedings is, therefore, subject to judicial review. Accordingly, the orders dated 6th June 2024 and 10th February 2025 passed by the NCLT, New Delhi, on the administrative side, are without any legal authority and are liable to be quashed and set aside.

Moreover, since the issue of transfer of these petitions was already pending before the NCLT, New Delhi, on the judicial side, the exercise of administrative powers in this manner has rendered those proceedings ineffective, which further fortifies the impropriety of the orders.

I answer the question No.(ii) accordingly.”

# 13. The primary issue for our consideration before us is as to whether NCLT, New Delhi, Bench-II, could exercise jurisdiction over proceedings initiated under Section 95 of the Insolvency and Bankruptcy Code, 2016, against a Personal Guarantor, when the CIR Proceedings of the Corporate Debtor is already pending before the NCLT, Chandigarh Bench-II, and whether it is against the provisions under Section 60(2) of the Code? Further whether Rule 16(d) of the NCLT Rules, 2016, restricts the power and functions of the President to allow such transfer applications in such situations as is in this case.

# 14. Before proceeding further, it will be useful to extract the provisions of Section 60(2) of the Insolvency and Bankruptcy Code noted as follows:

“Section 60: Adjudicating Authority for corporate persons

(1) The Adjudicating Authority, in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof shall be the National Company Law Tribunal having territorial jurisdiction over the place where the registered office of the corporate persons located.

(2) Without prejudice to sub-section (1) and notwithstanding anything to the contrary contained in this Code, where a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before a National Company Law Tribunal, an application relating to the insolvency resolution or liquidation or bankruptcy of a corporate guarantor or personal guarantor, as the case may be, of such corporate debtor shall be filed before such National Company Law Tribunal.

(3) An insolvency resolution process or liquidation or bankruptcy proceeding of a corporate guarantor or personal guarantor, as the case may be, of the corporate debtor pending in any court or tribunal shall stand transferred to the Adjudicating Authority dealing with insolvency resolution process or liquidation proceeding of such corporate debtor”

# 15. We note that Section 60(2) of the Insolvency and Bankruptcy Code, 2016, clearly provides that where a CIRP or liquidation proceeding of a Corporate Debtor is pending before a particular Bench of the NCLT, any application relating to the insolvency resolution or bankruptcy of the Personal Guarantor of such Corporate Debtor shall be filed before the same Bench. Apparently, the intent is to ensure consolidation of proceedings, judicial consistency, and avoidance of conflicting decisions. The provisions of Section 60(2), because of use of non-obstinate clause, will have an overriding effect under the circumstances to Section 60(1), as far as it relates to defining of territorial jurisdiction for cognizance of proceeding under the Code. Thus, this is an overriding statutory mandate under Section 60(2) of the Insolvency and Bankruptcy Code, 2016. Therefore, NCLT, New Delhi, lacks both territorial jurisdiction as well as inherent jurisdiction to entertain or proceed with the Section 95 application against the Appellant, and any continuation of such proceedings would be void ab initio and without jurisdiction.

# 16. It was also brought to our notice that this Appellate Tribunal in Company Appeal (AT) (Insolvency) No. 58 of 2023, Ankit Miglani v. State Bank of India [(2023) ibclaw.in 292 NCLAT], after an exhaustive consideration of the scheme and scope of Section 60(1), (2) and (3) of the Insolvency and Bankruptcy Code, 2016, decided on 19.04.2023, that Section 60(2) of the Code is mandatory in nature and admits of no discretion. It was held that:

• The Scheme of the Code as per Section 60 is that Adjudicating Authority, in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors in the NCLT having territorial jurisdiction over the place where the registered office of a corporate person is located. The Corporate Person in the present case is Uttam Galva Metallics Limited, whose registered office admittedly is in the State of Haryana. Sub-section (2) of Section 60 contains an addition to Section 60(1), which provides that where a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before a National Company Law Tribunal, an application relating to the insolvency resolution process of a corporate guarantor or personal guarantor shall be filed before such National Company Law Tribunal.

# 17. We further note that, this Appellate Tribunal had also considered the Scheme of Section 60, sub-section (2) in Company Appeal (AT) (Insolvency) No.60 of 2022 – State Bank of India, Stressed Asset Management Branch vs. Mahendra Kumar Jajodia, Personal Guarantor to Corporate Debtor [(2022) ibclaw.in 89 NCLAT], wherein, the Ld. Adjudicating Authority had held that no CIRP or liquidation proceedings of the Corporate Debtor being pending, the Application filed under Section 95 was rejected. In the above context, this Appellate Tribunal examined the statutory Scheme of Section 60 and in paragraphs 7 to 10, following was held:

• “7. Sub-Section 1 of Section 60 provides that Adjudicating Authority for the corporate persons including corporate debtors and personal guarantors shall be the NCLT. The Sub-Section 2 of Section 60 requires that where a CIRP or Liquidation Process of the Corporate Debtor is pending before ‘a’ National Company Law Tribunal the application relating to CIRP of the Corporate Guarantor or Personal Guarantor as the case may be of such Corporate Debtor shall be filed before ‘such’ National Company Law Tribunal. The purpose and object of the sub-section 2 of Section 60 of the Code is that when proceedings are pending in ‘a’ National Company Law Tribunal, any proceeding against Corporate Guarantor should also be filed before ‘such’ National Company Law Tribunal. The idea is that both proceedings be entertained by one and the same NCLT. The sub-section 2 of Section 60 does not in any way prohibit filing of proceedings under Section 95 of the Code even if no proceeding are pending before NCLT.

• 8. The use of words ‘a’ and ‘such’ before National Company Law Tribunal clearly indicates that Section 60(2) was applicable only when a CIRP or Liquidation Proceeding of a Corporate Debtor is pending before NCLT. The object is that when a CIRP or Liquidation Proceeding of a Corporate Debtor is pending before ‘a’ NCLT the application relating to Insolvency Process of a Corporate Guarantor or Personal Guarantor should be filed before the same NCLT. This was to avoid two different NCLT to take up CIRP of Corporate Guarantor. Section 60(2) is applicable only when CIRP or Liquidation Proceeding of a Corporate Debtor is pending, when CIRP or Liquidation Proceeding are not pending with regard to the Corporate Debtor there is no applicability of Section 60(2).

• 9. Section 60(2) begins with expression ‘Without prejudice to sub-section (1)’ thus provision of Section 60(2) are without prejudice to Section 60(1) and are supplemental to sub-section (1) of Section 60.

• 10. Sub-Section 1 of Section 60 provides that Adjudicating Authority in relation to Insolvency or Liquidation for Corporate Debtor including Corporate Guarantor or Personal Guarantor shall be the NCLT having territorial jurisdiction over the place where the Registered Office of the Corporate Person is located. The substantive provision for an Adjudicating Authority is Section 60, sub-Section (1), when a particular case is not covered under Section 60(2) the Application as referred to in sub-section (1) of Section 60 can be very well filed in the NCLT having territorial jurisdiction over the place where the Registered Office of corporate Person is located.”

# 18. As noted by this Appellate Tribunal in above noted judgments, we find that it has been unequivocally laid down that where a Corporate Insolvency Resolution Process of the Corporate Debtor is pending before a particular Bench of the National Company Law Tribunal, any application relating to the insolvency resolution or bankruptcy of the Personal Guarantor of such Corporate Debtor must necessarily be instituted before the very same Ld. Adjudicating Authority (Bench), and not before any other Bench. It ensures consolidation of proceedings, judicial consistency, and avoidance of parallel or conflicting decisions by different Benches of the NCLT. Furthermore, we agree with the arguments that assumption of jurisdiction by any other Bench, in the absence of a pending CIRP before it, constitutes a lack of territorial jurisdiction. We thus find that by applying the said ratio, once the CIRP of the Corporate Debtor is admittedly pending before the Hon’ble NCLT, Chandigarh Bench-II, the initiation and continuation of proceedings under Section 95 IBC against the Appellant before the Hon’ble NCLT, Bench-II, New Delhi are wholly without jurisdiction, non-est in law, and liable to be set aside.

# 19. The Impugned Order, therefore, runs directly contrary to the settled law laid down by this Appellate Tribunal and warrants our interference on this ground alone. Thus, in view of the foregoing facts and circumstances, the statutory mandate contained in Section 60(2) read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016, it is manifest that the assumption and continuation of jurisdiction by the Hon’ble NCLT, New Delhi in CP (IB) No. 419/ND/2023 is wholly without authority of law and vitiated by a jurisdictional error.

# 20. The position of law as per Insolvency and Bankruptcy Code 2016 and the related NCLT Rules 2016 is recapitulated as below for ready reference:

• Section 60 (2): Without prejudice to sub-section (1) and notwithstanding anything to the contrary contained in this Code, where a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before a National Company Law Tribunal, an application relating to the insolvency resolution or liquidation or bankruptcy of a corporate guarantor or personal guarantor, as the case may be, of such corporate debtor shall be filed before such National Company Law Tribunal.

• Rule 16 (d) in addition to the general powers provided in the Act and in these Rules, the President shall exercise the following powers, namely: – transfer any case from one Bench to other Bench when the circumstances so warrant”

• “Bench” per Rule 2(7) of NCLT Rules 2016: “bench means a bench of the tribunal constituted under Section 419 of the Act and includes circuit benches constituted by the President with prior approval of the Central Government to sit at such other geographical locations as may be necessary, having regard to requirements.”

# 21. The perusal of the above legal position makes things very clear. Rule 16(d) of the NCLT Rules 2016, administratively equips the President NCLT with sufficient power to transfer any case from one bench to the other bench. Further, the power of President NCLT is not restricted nor clouded to any territorial location. Rather the President NCLT is empowered to transfer a case as per the criteria laid down in section 60(2) of the Code, which empowers to transfer proceedings against personal guarantor from some other bench to where the proceedings against the Corporate Debtor were going on. We note that it will create anomalous situations by a narrow interpretation that Rule 16(d) restricts it to the same territorial jurisdiction as has happened in this particular case.

# 22. We thus observe that a combined reading of Section 60 of the Code, Rule 16 (d) and Rule 2(7) of NCLT Rules 2016 indicates that the President NCLT is empowered to transfer any case from one bench to the other bench having regard to requirements. It is all the more important per Section 60 when the CIR proceeding against the Corporate Debtor is going on in one bench, the President is very well empowered under Section 60(2) of the Code to transfer proceedings against personal guarantor from some other bench to where the proceedings against the corporate debtor were going on.

# 23. We note that the insolvency proceedings against the Corporate Debtor are going on in the NCLT bench in Chandigarh and the insolvency proceedings against the personal guarantor have been initiated in another bench in another territorial location at New Delhi. Even the transfer application has been dismissed by the President NCLT, ignoring the provisions in Section 60(2) of the Code but on a very narrow interpretation of Rule 16(d) that the proceedings cannot be transferred from one territorial jurisdiction to another territorial jurisdiction.

# 24. Thus we find that the Ld. Adjudicating Authority has misconstrued the scope of Rule 16(d) of the National Company Law Tribunal Rules, 2016 as being confined only to intra-territorial transfers, thereby completely disregarding and rendering otiose the jurisdictional command contained in Section 60(2) of the Insolvency and Bankruptcy Code, 2016, though being overriding provision which obligates that all insolvency proceedings in respect of a Corporate Debtor and its corporate guarantor must be heard by the same Ld. Adjudicating Authority (Bench) having jurisdiction over the Corporate Debtor. Section 60(2) of the Insolvency and Bankruptcy Code, 2016, in clear and mandatory terms, provides that where a CIRP or liquidation proceeding of a Corporate Debtor is pending before a particular Bench of the NCLT, any application relating to the insolvency resolution or bankruptcy of the Personal Guarantor of such Corporate Debtor shall be filed before the same Bench. In view of the aforesaid overriding statutory mandate under Section 60(2) of the Insolvency and Bankruptcy Code, 2016, the Hon’ble NCLT, New Delhi, lacks both territorial jurisdiction as well as inherent jurisdiction to entertain or proceed with the Section 95 application against the Appellant, and any continuation of such proceedings would be void ab initio, coram non judice, without jurisdiction, and wholly unsustainable in law.

# 25. We also note that the Transfer Application specifically raised a threshold and objection of jurisdiction, contending that proceedings under Section 95 IBC against a Personal Guarantor cannot be maintained before NCLT New Delhi when the CIRP of the Corporate Debtor is pending before NCLT Chandigarh, which alone has exclusive territorial and subject-matter jurisdiction under Section 60(2) of the Code. In this case we find that the proceedings against the Corporate Debtor were going on in NCLT Chandigarh in one of the benches and simultaneously proceedings against the personal guarantor have been initiated in NCLT Delhi in another bench. It would have been appropriate that this application should have been dismissed as non-maintainable at the stage of the admission itself and the applicant should have been advised to file it before the appropriate bench, that is in Chandigarh. In any case when the transfer application was filed before the President, the President while relying on the judgement of Hon’ble Gujarat High Court has not been allowed the transfer, which is against the provisions of the Code and a very narrow interpretation of Rule 16 (d) of the NCLT Rules.

Orders

# 26. Therefore, we set aside the order of the President NCLT in TA(IBC)-50(PB)/2024 and quash the proceedings in CP(IB) No. 419/ND/2023. Respondents are provided liberty to file proceedings as per law as an Operational Creditor under Section 95 before NCLT with appropriate jurisdiction in the matter.

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