Case Details

Case Name: M/s Canara Bank vs. Mr. Gaurav Aggarwal

Parties: Petitioner/Financial Creditor - Canara Bank; Respondent/Personal Guarantor - Mr. Gaurav Aggarwal; Resolution Professional - Mr. Mohammad Khalid

Court/Authority: National Company Law Tribunal, Principal Bench

Case Numbers: IA-632/2025 in CP No. IB 798(PB)/2024

Date of Order: Order pronounced on 21.05.2026 (Order reserved on 13.05.2026)

Period of Violation/Dispute: Default occurred on 31.01.2014 when account was classified as NPA; Demand notice issued on 05.02.2024; Petition filed on 22.11.2024

Parties Involved

Petitioner: Canara Bank (Lead bank of consortium)

Respondent: Mr. Gaurav Aggarwal (Personal Guarantor)

Corporate Debtor: M/s Allied Strips Limited

Resolution Professional: Mr. Mohammad Khalid (Registration no. IBBI/IPA-002/IP-N01289/2024-25/14417)

Other Guarantors: Mr. Mohinder Kumar Aggarwal, Ms. Sunita Aggarwal

Consortium Banks: Oriental Bank of Commerce, Dena Bank, Punjab National Bank, UCO Bank, Canara Bank

Legal Representatives: Mr. Ravi Kumar, Advocate along with Mr. Krishan Kumar and Ms. Nitin Pal, Advocates for Petitioner; Mr. Rachit Ranjan, Advocate for RP

Issues / Allegations / Violations

The case involves default on credit facilities availed by Allied Strips Limited from a consortium of five banks with Canara Bank as lead bank. Facilities included: Open Cash Credit for Rs. 18 crores, Working Capital Term Loan for Rs. 18 crores, Bank Guarantee for Rs. 7 crores, Short Term Bank Guarantee for Rs. 400 Lakhs, Term Loan-I for Rs. 125 Lakhs, Term Loan-II for Rs. 460 Lakhs, Term Loan-III for Rs. 195 lakhs, and Letter of Credit facilities.

Mr. Gaurav Aggarwal provided personal guarantees vide guarantee deeds dated 30.11.2011 and 30.12.2013. The Corporate Debtor's account was classified as Non-Performing Asset (NPA) on 31.01.2014 due to defaults in repayment obligations. Despite debt acknowledgment by Corporate Debtor on 14.09.2015 and loan recall notice under SARFAESI Act on 15.02.2016, the amounts remained unpaid.

Debt Recovery Tribunal-II, New Delhi granted recovery rights of INR 1,049,41,87,153.65/- against Corporate Debtor and Personal Guarantor vide order dated 06.12.2019 in OA No. 630/2017. Corporate Debtor underwent CIRP (admitted 16.03.2018, resolution plan approved 02.12.2022). Current outstanding debt claimed is Rs. 1,295,23,29,130/-.

Findings & Observations

The Adjudicating Authority found that:

  • The application under Section 95(1) is complete in all respects
  • The debt arises from guarantees extended by Respondent for credit facilities availed by Corporate Debtor from Applicant bank
  • The debt has become due and remains unpaid, evidenced by NPA classification, SARFAESI notices, DRT recovery order, CIRP completion, and Demand Notice in Form B
  • The Personal Guarantor has not denied liability or objected to proceedings initiation
  • All conditions under Section 100(1) stand satisfied: application complete, debt due and payable by guarantor, and guarantor has not repaid debt

The Resolution Professional determined that:

  • There has been a debt that became due and payable
  • Financial creditor recalled entire outstanding loan amount under Loan/Guarantee Agreements
  • Personal Guarantor failed to make payment of entire outstanding loan amount under Guarantee Agreements
  • Default occurred within meaning of Section 3(12) of IBC 2016

Penalties / Settlements / Directions

The Adjudicating Authority ordered:

  • Application under Section 95(1) admitted and Insolvency Resolution Process against Personal Guarantor initiated
  • Interim Moratorium under Section 96(1) ceased to have effect
  • Fresh moratorium under Section 101 declared for 180 days or until order under Section 114 passed
  • During moratorium: pending legal actions/proceedings stayed; creditors cannot initiate legal actions; debtor cannot transfer/alienate assets
  • Mr. Mohammad Khalid continues as Resolution Professional
  • RP to publish public notice within 7 days inviting claims from all creditors
  • RP to prepare list of creditors within 30 days from notice date
  • Debtor to prepare Repayment Plan in consultation with RP
  • RP to submit Repayment Plan with report within 21 days from last claims submission date
  • Financial Creditor to deposit Rs. 1,00,000/- with RP for expenses
  • RP to submit status report every 30 days before Tribunal
  • Matter listed for status report on 14.07.2026

Corrective Actions & Future Obligations

Resolution Professional's Obligations:

  • Publish public notice in English and vernacular newspapers within 7 days
  • Prepare list of creditors within 30 days from notice date
  • Assist debtor in preparing Repayment Plan including payment of RP fees
  • Submit Repayment Plan with report to Adjudicating Authority within 21 days from last claims submission date
  • Determine if creditors meeting required and specify details if summoned
  • Conduct meeting of creditors according to Sections 108-111 if required
  • Prepare report of meeting with all details under Section 112
  • Submit status report every 30 days to Tribunal
  • Perform functions in compliance with Code of Conduct under Section 208

Debtor's Obligations:

  • Prepare Repayment Plan in consultation with Resolution Professional

Financial Creditor's Obligations:

  • Deposit Rs. 1,00,000/- with RP for expenses

Final Ruling & Enforcement

The Adjudicating Authority admitted the application under Section 95(1) and initiated Insolvency Resolution Process against Personal Guarantor Mr. Gaurav Aggarwal. The moratorium under Section 101 is effective immediately for 180 days. The Resolution Professional is directed to proceed with all necessary steps under Part III, Chapter III of the Code. The registry is directed to communicate copies to all concerned and to IBBI. IA No. 598/2025 is allowed and disposed of.