Samunnati Finance Pvt. Ltd. vs Renukadevi Anguraj - We fully endorse with the view taken by the Principal Bench, NCLT, New Delhi in the case of Alchemist Asset Reconstruction supra, in the order dated 25.01.2022 that Personal Guarantor is an individual who has stood as Guarantee to the Corporate Debtor. Section 95 petition is for initiating insolvency resolution process against the Personal Guarantor and it is not the case for recovery of any amount because that will go contrary to the scheme of IBC, 2016. In such a situation, on the demise of the Personal Guarantor the proceedings under Section 95 of IBC against an individual who has given his guarantee in favour of Corporate Debtor after her death, would abate and the petition under Section 95 has to be closed.

 NCLT Chennai (2026.10.07) in Samunnati Finance Pvt. Ltd. vs Renukadevi Anguraj   [(2026) ibclaw.in 3860 NCLT, CP(IB)/251(CHE)/2025 along with IA(IBC)/1587(CHE)/2025 in CP(IB)/251(CHE)/2025] held that; 

• We fully endorse with the view taken by the Principal Bench, NCLT, New Delhi in the case of Alchemist Asset Reconstruction supra, in the order dated 25.01.2022 that Personal Guarantor is an individual who has stood as Guarantee to the Corporate Debtor. Section 95 petition is for initiating insolvency resolution process against the Personal Guarantor and it is not the case for recovery of any amount because that will go contrary to the scheme of IBC, 2016. In such a situation, on the demise of the Personal Guarantor the proceedings under Section 95 of IBC against an individual who has given his guarantee in favour of Corporate Debtor after her death, would abate and the petition under Section 95 has to be closed.

• It was rightly observed in the case of Bank of Baroda supra that the assets of the Personal Guarantor are hit by moratorium and if the legal heirs of the deceased guarantor are put into the shoes of the Personal Guarantor, their personal assets will also get automatically hit by the moratorium which will cause grave prejudice to the rights of the third party. Further, there is no provision in the Code envisaging the concept of legal heirs stepping into the shoes of the deceased Personal Guarantor.

Excerpts of the order;

# 1. This Petition has been filed u/s. 95 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016″) r/w Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 by Samunnati Finance Private Limited (“Financial Creditor”) for initiating insolvency resolution process against Ms. Renukadevi Anguraj (“Personal Guarantor”) in respect of default amount of Rs. 5,35,96,045 /- together with interest and penalties. The Date of Default, as specified in Part-III of the Petition, is 25.03.2024. The Petitioner has placed Deed of Guarantee dated 27.02.2019 and 05.01.2023 and Demand Notice under Form B dated 29.04.2025. This Petition has been filed on 02.08.2025.

# 2. Part -1 of the petition provides the details of the Financial Creditor i.e. Samunnati Finance Private Limited. Part – II of the petition provides the details of the Personal Guarantor i.e. Renukadevi Anguraj. She was the resident of 3/5 Nagar, Dindigul Main Road, Dindigul, Tamilnadu – 624619. She was Director in the Corporate Debtor Srinithi Enterprises Private Limited which has its registered office at Sarada Nagar, Virugambakkam, Chennai within the jurisdiction of this Tribunal. Part – III of the petition sets out the particulars of the debt being Rs. 5,35,96,045/- as on 29.04.2025 and the date of default as 25.03.2024.

# 3. As per the averments made in the petition, the Corporate Debtor engaged in the trading of dairy products had availed short term loan of Rs. 3.0 Crore from the Financial Creditor Samunnati Financial Intermediation and Services Private Limited, NBFC registered with RBI which was transferred with Samunnati Finance Private Limited by the order of NCLT Chennai Bench vide dated 23.12.2022. The short term loan was renewed / modified / enhanced from time to time and the last renewal was made vide sanction letter dated 30.12.2022 enhancing the credit facility limit to Rs. 4.0 Crore. The Corporate Debtor executed various documents favouring the Financial Creditor. The Respondent / Director of the Corporate Debtor along with three others executed a deed of personal guarantee dated 05.01.2023 where they including the Respondent irrevocably, absolutely and unconditionally agreed to guarantee the repayment of loan obligations in the event of default by the Corporate Debtor. It is stated that despite multiple demand notices and reminder letters, the Corporate Debtor failed to make any payments towards the outstanding dues on the due dates. Accordingly, the Financial Creditor issued a recall notice dated 14.05.2024 to the Corporate Debtor and the Guarantors demanding repayment of a sum of Rs. 4,23,11,085/- overdue from the Corporate Debtor along with interest and penalty. However, they did not comply with the said demand and failed to discharge their liability arising out of the loan agreement and the deed of personal guarantee. The Financial Creditor then on 29.04.2025 issued a demand notice under Form B of Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 to the Personal Guarantors including the Respondent which was delivered on 02.05.2025, but the Respondent / Personal Guarantor neither responded to the notice nor filed any reply which made the Petitioner file the petition.

# 4. The Petitioner has placed the documents as detailed in the annexures to the petition at page 20 to 153.

# 5. On this petition, report from the IRP was called. He filed the report in IA(IBC)/1587(CHE)/2025 under Section 99 of IBC whereby she recommended for initiation of insolvency proceedings against the Respondent / Personal Guarantor Ms. Renukadevi Anguraj. The report is taken on record and the application IA(IBC)/1587(CHE)/2025 is disposed of.

# 6. Notice of the petition and the report was sent to the Respondent / Personal Guarantor. Shri. Prannit Stefano, Counsel appeared for the Personal Guarantor and submitted that the Personal Guarantor Ms. Renukadevi Anguraj has died in an accident. He filed the death certificate. On perusal, we find that she died on 19.04.2026 in an accident. This fact is also confirmed by the Counsel appeared on behalf of the Petitioner.

# 7. It is submitted on behalf of the Respondent that the proceedings against the Personal Guarantor have to be closed as the proceedings will abate consequent to the death of the Personal Guarantor. Reference has been made to the definition of Personal Guarantor given in Section 5(22) of IBC which means an individual who is the surety in a contract of guarantee to a Corporate Debtor. It is submitted that the Personal Guarantor is an individual who stood as a Guarantee to the Corporate Debtor and therefore on her demise, the proceedings against the Personal Guarantor would abate. It is submitted that the proceedings under IBC are not in the nature of recovery.

# 8. The case of Alchemist Asset Reconstruction Company vs. Deepak Puri in IB/438(PB)(2021) is referred where the Principal Bench of NCLT, New Delhi in its order dated 25.01.2022, held that in the case of proceedings under Section 95 of IBC which is not a case for recovery of any amount, after the demise of the Personal Guarantor as an individual who has given a guarantee in favour of the Corporate Debtor, there is no question of continuing the proceedings against such a dead person and the proceedings have to be closed. The case of Bank of Baroda, SAMB vs. Divya Jalan, CP(IB) No.363/2021 is also referred where NCLT, Kolkata Bench took a similar view in its order dated 11.02.2022. Following provisions / regulations were cited which are reproduced as under:

# 9. In the order, it was held that in a petition under Section 95 of IBC, the assets of the Personal Guarantor are hit by moratorium and if legal heirs of the deceased Personal Guarantor are put into the shoes of the Personal Guarantor, then their personal assets will also get automatically hit by moratorium which will cause grave prejudice to the rights of the third party. There is no provision in the Code which envisages the concept of legal heirs stepping into the shoes of the deceased Personal Guarantor. It was held that the petition cannot be maintained against the legal heirs of the deceased Personal Guarantor. However, liberty was given to the creditor to pursue other recovery measures available under the law.

# 10. Ld. Counsel for the Petitioner per contra argued that as per section 169 of IBC, 2016 proceedings can be continued against the legal heirs of the bankrupt and also the said provision is in pari-materia to section 17 of the Provincial Insolvency Act, 1920 and section 93 of the Presidency Town Insolvency Act, 1909.

# 11. Ld. Counsel referred the case of State Bank of India SAMB v. Vijay Pal Garg IB 112(ND)/2022 where the case of IB/438/PB of 2021 titled Alchemist Asset Reconstruction Company supra, was discussed where it was observed that in the instant case, no death certificate has been produced regarding the death of the Personal Guarantor. In the absence of any document, it cannot be presumed that the person has expired. Order 22 Rule 4 and Rule 4A CPC, 1908 were referred which provide that if the sole defendant dies, right to sue survives against the legal representatives of the deceased defendant. It was observed that the Ld. Principal Bench did not consider Order 22 Rule 4 and Rue 4A while passing the order. The Tribunal thereafter directed the person appearing on behalf of the Personal Guarantor to file an affidavit whether personal guarantor is still alive or not. Ld. Counsel also referred the case of Reliance Capital AF Trustee Company Pvt. Ltd. v. S. Sailesh & Anr. CP(IB) No.132 of 2020 decided on 08.06.2022. Ld., Counsel submits that this issue is pending consideration before the Hon’ble NCLAT.

# 12. Ld. Counsel has also referred the case of Invent Assests Securitization and reconstruction Private Limited vs. Popatlal K Jain (Legal heir of late Smt Sakuben K Jain Personal Guarantor of Shree Daksh Jyot Silk Mills Private Limited) CP(IB)-203(MB)/2023 to contend that legal heirs can be substituted in place of the deceased personal guarantor.

# 13. Ld. Counsel argued that under the old insolvency laws, like the Presidency Towns Insolvency Act, 1909, proceedings could continue against the estate of a deceased debtor by substituting legal heirs, and therefore a similar approach should be taken under the IBC.

# 14. We have given our thoughtful consideration to contentions of both the parties.

# 15. Ld. Counsel for the Petitioner contends that, in the Presidency Towns Insolvency Act, 1909, proceedings could continue against the estate of a deceased debtor by substituting legal heirs, and therefore a similar approach should be taken under the IBC. This Tribunal is of the view that, this contention of the Petitioner does not hold any merit as those enactments have been repealed by Section 243 of the Code and creditors are free to proceed against the estate of the deceased guarantor under other laws, such as the Indian Contract Act and the CPC, but not under the IBC framework.

# 16. It is not in dispute that the Respondent/Personal Guarantor expired on 19.04.2026. Death Certificate in this respect has been placed on record.

# 17. We fully endorse with the view taken by the Principal Bench, NCLT, New Delhi in the case of Alchemist Asset Reconstruction supra, in the order dated 25.01.2022 that Personal Guarantor is an individual who has stood as Guarantee to the Corporate Debtor. Section 95 petition is for initiating insolvency resolution process against the Personal Guarantor and it is not the case for recovery of any amount because that will go contrary to the scheme of IBC, 2016. In such a situation, on the demise of the Personal Guarantor the proceedings under Section 95 of IBC against an individual who has given his guarantee in favour of Corporate Debtor after her death, would abate and the petition under Section 95 has to be closed. The similar view was taken by the other NCLTs in the cases referred supra.

# 18. The case of State Bank of India SAMB v. Vijay Pal Garg IB 112(ND)/2022 is distinguishable on facts. The Order 22, Rule 4 & Rule 4A of Civil Procedure Code, 1908 are applicable for substituting the legal heirs of the deceased defendant representing the estate of the deceased. The IBC proceeding is not a recovery proceeding or the proceedings where the legal heirs have inherited the estate of the deceased. It only relates to insolvency of the Personal Guarantor. It was rightly observed in the case of Bank of Baroda supra that the assets of the Personal Guarantor are hit by moratorium and if the legal heirs of the deceased guarantor are put into the shoes of the Personal Guarantor, their personal assets will also get automatically hit by the moratorium which will cause grave prejudice to the rights of the third party. Further, there is no provision in the Code envisaging the concept of legal heirs stepping into the shoes of the deceased Personal Guarantor.

# 19. In the light of what has been stated above, we decide the issue in favour of the Respondent holding that the proceedings against the Personal Guarantor will abate after the death of the Personal Guarantor. The insolvency proceedings against the Personal Guarantor are accordingly closed.

# 20 The Petition CP(IB)/251(CHE)/2025 is dismissed with no orders as to costs.

# 21. File be consigned to records.

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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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