Authority: National Company Law Tribunal Mumbai Bench - I

Order Date: 16 July 2026

Case Overview

The National Company Law Tribunal (NCLT) Mumbai Bench heard an insolvency petition (C.P. (IB) No. 560 of 2025) filed by Bank of Baroda against Mrs. Kajal Vikas Chaudhary under Section 95(1) of the Insolvency & Bankruptcy Code, 2016. The petition sought initiation of insolvency resolution process against Mrs. Chaudhary in her capacity as personal guarantor for credit facilities extended to M/s. Card Pro Solutions Private Limited.

Bank of Baroda, represented by Chief Manager Mr. Snehashish Sarkar, claimed a default amount of ₹9,85,90,405.09 (comprising principal outstanding of ₹4,52,67,458.00, interest of ₹4,76,04,668.58, and penal interest of ₹57,18,278.51) as on 24 September 2024. The date of default was stated as 1 July 2019, and the account was classified as Non-Performing Asset (NPA) on 31 December 2019.

The financial creditor submitted that the corporate debtor had availed credit facilities pursuant to sanction letters dated 22 September 2011 and 11 May 2012. Mrs. Chaudhary executed Letters of Personal Guarantee dated 4 October 2011 and 1 October 2012, along with Letters of General Lien dated 4 October 2011 and 4 June 2015, to secure these facilities.

Insolvency proceedings had already been initiated against the corporate debtor, Card Pro Solutions Private Limited, in C.P. No. 4481 of 2019, which was admitted by the Adjudicating Authority on 16 February 2024. Bank of Baroda issued a Demand Notice in Form B dated 24 September 2024 to the personal guarantor, who failed to discharge the outstanding liability.

The respondent raised two principal objections: (1) the application was barred by limitation since the Form B notice was issued on 24 September 2024 while the date of default was 1 July 2019, and (2) the personal guarantee was not validly invoked prior to filing the application. In rejoinder, the applicant produced a Demand Notice dated 28 February 2023 issued under Section 13(2) of the SARFAESI Act, 2002 as proof of invocation.

The Tribunal had appointed Mr. Dhiren Shantilal Shah (Registration No. IBBI/IPA-001/IP-P00220/2017-18/10419) as Resolution Professional vide order dated 3 July 2025. The RP examined the application and recommended admission under Section 100 of the Code.

Final Outcome

The NCLT admitted the petition and initiated insolvency resolution process against Mrs. Kajal Vikas Chaudhary. The Tribunal declared a moratorium for 180 days from the date of admission (16 July 2026) under Section 101 of IBC, 2016, staying all legal proceedings against the personal guarantor and restricting asset transfers. The Resolution Professional was directed to publish a public notice within 7 days inviting claims from creditors within 21 days. Bank of Baroda was directed to deposit ₹75,000 to the RP's bank account within one week towards fees and expenses.

The Tribunal overruled the limitation objection, holding that limitation would run from the expiry of the period stated in the notice dated 28 February 2023 issued under Section 13(2) of SARFAESI Act, and thus the petition filed in 2025 was within the 3-year limitation period.

Topics: Personal Guarantor Insolvency, Debt Recovery, NCLT Proceedings