Authority: National Company Law Appellate Tribunal, Principal Bench, New Delhi

Order Date: 13-08-2026

Case Overview

The appeal was filed by Asif Ahmed Siddique, personal guarantor of Nyka Steel Private Limited, against an order dated 03.02.2026 passed by the National Company Law Tribunal, Mumbai Bench-I. The NCLT had admitted an application filed by UCO Bank under Section 95 read with Section 60(2) of the Insolvency and Bankruptcy Code, 2016, initiating insolvency resolution process against the appellant. The NCLT had declared a moratorium under Section 101 of the Code and appointed Mr. Atul Narayan Naik as the Resolution Professional.

The appellant raised several contentions: (1) No fresh deed of personal guarantee was executed for the renewed credit facilities sanctioned on 12.04.2018; (2) The account was wrongfully classified as NPA on 18.01.2020 with retrospective effect from 30.09.2019 despite continued operations and payments until July 2020; (3) The contractual exposure under the deeds of guarantee was expressly capped at ₹40 crores and could not be enlarged to ₹96.23 crores; (4) The application was barred by limitation as the default date was 28.01.2020 and filing date was 22.12.2024; (5) The NCLT mechanically accepted the Resolution Professional's report without proper adjudication of objections.

UCO Bank had issued recall notice invoking personal guarantee on 18.01.2020 and subsequent demand notices dated 12.09.2023 (₹51,76,09,050.43) and 27.11.2024 (₹96,23,11,185.08). The corporate debtor, Nyka Steel Private Limited, was already undergoing CIRP before NCLT.

Final Outcome

The NCLAT dismissed the appeal, upholding the NCLT's order. The court found that: (1) The deed of guarantee dated 12.12.2017 was a continuing guarantee that covered interest at 12.70% per annum beyond the ₹40 crore principal amount; (2) The appellant had signed the renewal of credit facilities on 12.04.2018, indicating the guarantee extended to renewed facilities; (3) The NPA classification and recall notice were properly issued and served; (4) Proceedings under SARFAESI Act and IBC operate in distinct fields, and liability of personal guarantors survives approval of resolution plan as per Supreme Court precedent; (5) The application was not barred by limitation. The court concluded that no interference was warranted with the NCLT's order.

Topics: Personal Guarantor Insolvency, Continuing Guarantee Enforcement