Authority: National Company Law Appellate Tribunal, Principal Bench, New Delhi
Order Date: 30th October, 2026
Case Overview
The appeal was filed by Parveen Gupta against an order dated 22.01.2025 passed by the National Company Law Tribunal, Principal Bench, New Delhi in Company Petition No. (IB)-216(PB)/2021. The NCLT had admitted an application filed by Bank of India under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 against the appellant in his capacity as a Personal Guarantor for credit facilities extended to Shree Raj Mahal Jewellers Private Limited (Corporate Debtor), initiating insolvency resolution proceedings under Section 100(1) of the Code.
The Corporate Debtor had availed credit facilities of Rs. 45 crores initially sanctioned on 28.04.2010, with subsequent facilities increasing the total to Rs. 49 crores. The appellant had executed Deeds of Guarantee dated 01.05.2010, 17.09.2013, and 19.05.2014 during his tenure as director of the Corporate Debtor from 2009-2010 until his resignation on 01.10.2014.
The principal allegations centered around the appellant's liability as guarantor for debts amounting to approximately Rs. 113.83 crore as of 17.02.2021. The Corporate Debtor's account was classified as NPA on 30.06.2015, and the bank invoked the guarantee through a notice under Section 13(2) of SARFAESI Act on 08.04.2016.
The appellant challenged the proceedings on four main grounds: (1) the application was barred by limitation; (2) novation of contract discharged him from guarantee obligations after his resignation; (3) alleged forgery of his signatures on subsequent guarantee documents dated 27.12.2014 and sanction letter dated 23.01.2015; and (4) discharge due to bank's failure to enforce collateral securities worth approximately Rs. 100 crores.
The tribunal examined the limitation issue considering OTS proposals dated 23.03.2018 (submitted by Corporate Debtor) and 05.01.2021 (submitted by Ashok Goel, another director), finding these constituted acknowledgments under Section 18 of Limitation Act that extended the limitation period. The court noted Clause 12 of the Guarantee Deed dated 19.05.2014 specifically provided that acknowledgments by the borrower would bind the guarantors.
Regarding novation, the tribunal found that the appellant's resignation as director did not automatically terminate his contractual obligations as guarantor, and subsequent credit facility revisions did not establish complete substitution of the original contract. The court referenced Clause 14 of the guarantee agreement which preserved guarantor obligations despite variations in loan terms.
On the forgery allegations, the tribunal noted the appellant's challenge was belated (raised in 2024 despite proceedings commencing in 2021) and that such allegations required proof in appropriate proceedings rather than summary insolvency proceedings. The bank's attendance records showed the appellant's presence on dates of earlier guarantee executions but not on the disputed dates of 27.12.2014 and 23.01.2015.
The claim of discharge due to bank's failure to enforce collateral securities was rejected as the appellant failed to establish that the bank's conduct satisfied the conditions for discharge under Sections 134 or 139 of the Indian Contract Act.
Final Outcome
The NCLAT dismissed the appeal and upheld the NCLT order dated 22.01.2025 admitting the insolvency resolution proceedings against Parveen Gupta as personal guarantor. The interim moratorium under Section 96 was vacated and the moratorium under Section 101 came into effect. The Resolution Professional was directed to proceed under Chapter III of Part III of the IBC, including issuing public notice under Section 102 and inviting claims from creditors.
Topics: Personal Guarantor Insolvency, Limitation Law, Guarantee Contracts