Authority: National Company Law Tribunal (NCLT), Division Bench, Court - I, Ahmedabad

Order Date: 30/06/2026

Case Overview

The National Company Law Tribunal (NCLT), Ahmedabad, heard two main Company Petitions (C.P.(IB)/478(AHM)2025 and C.P.(IB)/480(AHM)2025) filed by Bank of Baroda (Applicant/Financial Creditor) under Section 95(1) of the Insolvency and Bankruptcy Code (IBC), 2016. The petitions sought initiation of the Insolvency Resolution Process (IRP) against Mr. Brijmohannath Biradnath Modi and Mr. Ronak Brijmohannath Modi (Respondents/Personal Guarantors) for a default amount of ₹13,69,47,419.19 as of 10 November 2025. The debt arose from their roles as personal guarantors to the corporate debtor, M/s. Fairdeal Jumbo Packaging Private Limited, for financial facilities that were restructured and enhanced to approximately ₹20.886 crores on 22 September 2021.

The Financial Creditor's case was that the corporate debtor had defaulted on its obligations, leading to the account being classified as a Non-Performing Asset (NPA). Demand notices were issued under the SARFAESI Act and later under IBC rules. The guarantors opposed the petitions, denying execution of the guarantee documents dated 22 September 2021 and alleging forgery of their signatures. Their primary defence relied on a Shareholders' Agreement dated 01 October 2021, executed between the Modi Group and the Sanklecha Group, which they claimed recorded their exit from the corporate debtor's management effective 31 May 2021 and obligated the Sanklecha Group to secure the release of their personal guarantees and indemnify them.

The Interim Resolution Professionals (IRPs) appointed by the tribunal, Mr. Rahul Shah (for Brijmohan Modi) and Mr. Dhaval C Khamar (for Ronak Modi), submitted reports under Section 99 IBC recommending admission of the petitions. The guarantors filed interlocutory applications (IA/507(AHM)2026 and IA/412(AHM)2026) seeking forensic examination of the disputed signatures, which the Financial Creditor opposed.

The tribunal framed six key issues for determination, including the maintainability of the petitions, execution of the guarantees, valid invocation, limitation, existence of debt and default, and the impact of the Shareholders' Agreement.

Final Outcome

The NCLT admitted both company petitions under Section 100 IBC, initiating the Insolvency Resolution Process against the personal guarantors. The tribunal held that:

  • The petitions were maintainable as all statutory requirements under Sections 95-99 IBC were met.
  • The execution of the personal guarantees was established for the purpose of summary proceedings under IBC, and the defence of forgery was contradictory and unsupported by prima facie evidence.
  • The guarantees were validly invoked, and the private Shareholders' Agreement could not extinguish the creditor's independent contractual rights as the bank was not a party to it.
  • The petitions were within the limitation period as the cause of action arose upon invocation of the guarantee in November 2025.
  • A financial debt and default were established, and the defence based on the Shareholders' Agreement was rejected.
  • The applications for forensic examination (IA/507/412) were dismissed as the tribunal found no material dissimilarity in the signatures upon prima facie comparison.
  • A moratorium was declared under Section 101 IBC for 180 days.
  • Mr. Rahul Shah (IBBI/IPA-001/IP-P-02170/2020-2021/13367) was appointed as the Resolution Professional for both guarantors, replacing Mr. Dhaval C Khamar in the case of Ronak Modi, as requested by the Financial Creditor in IA/787(AHM)2026.

Topics: Personal Guarantor Insolvency, Debt Recovery, Contractual Liability