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

Order Date: 02-11-2026

Case Overview

The National Company Law Appellate Tribunal (NCLAT) heard two consolidated appeals, Company Appeal (AT) (INS) No.1175/2026 and 1176/2026, filed by Vinod Doulatani and Haresh Doulatani (Appellants). The appeals challenged an order dated 19.06.2026 passed by the National Company Law Tribunal (NCLT), Mumbai Bench, in CP(IB)No.640(MB)/2026 and CP(IB)No.641(MB)/2026.

The proceedings were initiated by Respondent No.1, IIFL One Value Fund- Series B (a scheme under IIFL Alternative PE Fund), through an application under Section 95 of the Insolvency and Bankruptcy Code (IBC), seeking to initiate an Insolvency Resolution Process against the appellants in their capacity as Personal Guarantors to a Corporate Debtor. The NCLT, via the impugned order, had appointed Ms. Namrata Amol Randeri as the Resolution Professional under Section 97, issued an interim moratorium under Section 96, and directed the RP to examine the application, including issues of limitation and the invocation of the personal guarantee, and to submit a report under Section 99(I).

The core legal dispute centered on the locus standi of IIFL to file the application. The appellants argued that they had executed a Personal Guarantee Deed dated 14.10.2021 and another dated 12.05.2022 in favor of the Debenture Trustee, IDBI Trusteeship Services Ltd, for the benefit of all debenture holders. They contended that under the Debenture Trust Deed (DTD), the power to declare an event of default, accelerate repayment, invoke the guarantee, and initiate proceedings vested exclusively in the Debenture Trustee. Crucially, the Trustee could only act on the written instructions of the Majority Debenture Holders, defined as those representing not less than 75% of the outstanding debentures.

The appellants presented data from the 20th Committee of Creditors meeting (dated 13.06.2026) to demonstrate that IIFL was a minority debenture holder with only a 24.51% voting share. The majority holdings were with Rare Asset Reconstruction Ltd. (65.77%) and Renaissance Fiscal Services Pvt. Ltd. (4.49%). Since IIFL had not obtained instructions from the Majority Debenture Holders and the Debenture Trustee had not authorized or filed the petition, the appellants argued the invocation and the petition were without authority and non-est. They asserted that the NCLT erred by not deciding this threshold jurisdictional question of maintainability before appointing the RP.

The Respondent (IIFL) had issued a recall notice on 23.12.2024 and formally invoked the personal guarantee via a notice dated 17.03.2026. A Demand Notice in Form B under the relevant rules was issued on 05.05.2026, claiming a total outstanding debt of Rs. 206,42,01,875/- as of 31.03.2026.

The NCLAT analyzed the impugned NCLT order, which had declined to adjudicate the maintainability objections at the initial stage. The NCLT had relied on the Supreme Court's judgment in Dilip B Jiwrajka Vs. Union of India & Ors. (2023), which upheld the constitutional validity of Sections 94 to 100 of the IBC. The Supreme Court had held that no judicial adjudication is involved at the stages envisaged in Sections 95 to 99; the RP's role is facilitative and collative, and their report to the Adjudicating Authority is recommendatory.

Final Outcome

The NCLAT dismissed both appeals. The Tribunal concurred with the NCLT's approach and the precedent set by the Supreme Court in Dilip B Jiwrajka. It held that issues of locus standi and maintainability are mixed questions of fact and law that constitute "jurisdictional facts." The adjudicatory process for such questions commences only under Section 100 of the IBC, after the Resolution Professional has submitted their report under Section 99. The NCLAT found no error in the NCLT's order appointing the RP and directing an examination of the application, as this is the statutorily mandated procedure. The appellants' right to raise these objections was preserved for the adjudication stage under Section 100.

Topics: Personal Guarantor Insolvency, Locus Standi, Debenture Trust Deed