Case Details

Case Name: Canara Bank vs Mr. Mohender Aggarwal

Parties: Petitioner - Canara Bank (Financial Creditor); Respondent - Mr. Mohender Aggarwal (Personal Guarantor); Resolution Professional - Mohammad Khalid

Court/Authority: National Company Law Tribunal, Principal Bench

Case Numbers: CP No. IB 694(PB)/2024 with IA-2489/2025

Date of Order: 21 May 2026 (Order reserved on 13 May 2026)

Period of Violation: Default occurred on 31 January 2014 when account was classified as NPA

Parties Involved

Financial Creditor: Canara Bank (lead bank of consortium including Oriental Bank of Commerce, Dena Bank, Punjab National Bank, and UCO Bank)

Personal Guarantor: Mr. Mohender Aggarwal (also known as Mohinder Kumar Aggarwal)

Other Guarantors: Mr. Gaurav Aggarwal and Mrs. Sunita Aggarwal (mentioned but not parties to this proceeding)

Corporate Debtor: M/s Allied Strips Limited

Resolution Professional: Mr. Mohammad Khalid (IBBI/IPA-002/IP-N01289/2024-2025/14417)

Issues / Allegations / Violations

  • The Corporate Debtor, Allied Strips Limited, availed various credit facilities from a consortium of five banks with Canara Bank as lead bank, including: Open Cash Credit (₹18 crores), Working Capital Term Loan (₹18 crores), Bank Guarantee (₹7 crores), Short Term Bank Guarantee (₹400 Lakhs), Term Loan-I (₹125 Lakhs), Term Loan-II (₹460 Lakhs), Term Loan-III (₹195 lakhs), and Letter of Credit facilities
  • The loan amount was secured by personal guarantees of Mr. Mohinder Kumar Aggarwal, Mr. Gaurav Aggarwal and Mrs. Sunita Aggarwal vide guarantee deeds dated 30.11.2011 and 30.12.2013
  • The Corporate Debtor defaulted on repayment obligations, leading to NPA classification on 31.01.2014
  • Despite debt acknowledgment by Corporate Debtor on 14.09.2015 and SARFAESI notice issued on 15.02.2016, the debt remained unpaid
  • DRT-II, New Delhi granted recovery rights of ₹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) but personal guarantee obligations remained outstanding

Findings & Observations

  • The Resolution Professional determined that there exists a debt of ₹1295,23,29,130/- due and payable by the Personal Guarantor
  • The guarantee is of a continuing nature, making the application within limitation period
  • The liability of the guarantor is co-extensive with that of the Corporate Debtor
  • All conditions under Section 100(1) of IBC are satisfied: application is complete, debt is due and payable, and guarantor has not repaid the debt
  • The Personal Guarantor did not deny liability or object to the initiation of proceedings

Penalties / Settlements / Directions

  • Application under Section 95(1) admitted and Insolvency Resolution Process initiated against Personal Guarantor
  • Fresh moratorium under Section 101 declared for 180 days or until order under Section 114 is passed
  • During moratorium: pending legal actions stayed, creditors cannot initiate new proceedings, debtor cannot transfer/alienate assets
  • Resolution Professional Mr. Mohammad Khalid directed to take all steps under Part III, Chapter III of IBC
  • Financial Creditor to deposit ₹1,00,000/- with RP for expenses of public notice and claim invitations
  • RP to publish public notice in English and vernacular newspapers within 7 days
  • RP to prepare list of creditors within 30 days from notice date
  • Debtor to prepare Repayment Plan in consultation with RP
  • RP to submit status report every 30 days before Tribunal

Corrective Actions & Future Obligations

  • RP must publish public notice inviting claims from all creditors within 21 days
  • RP to prepare list of creditors within 30 days from notice date
  • Debtor must prepare Repayment Plan in consultation with RP, including provisions for payment of RP fees
  • RP to submit Repayment Plan with report to Adjudicating Authority within 21 days from last date of claim submission
  • If creditors meeting required, it must be conducted with 14-28 days notice following Sections 108-111 of IBC
  • RP must perform functions in compliance with Code of Conduct under Section 208 of IBC

Final Ruling & Enforcement

  • IA No. 2489/2025 allowed and disposed of
  • Insolvency Resolution Process formally initiated against Personal Guarantor/Respondent
  • Matter listed for status report by RP on 14.07.2026
  • Registry directed to communicate order to all concerned and to IBBI within 7 working days
  • Interim moratorium under Section 96(1) ceased effect, replaced by fresh moratorium under Section 101