NCLT Admits Canara Bank's Insolvency Petition Against Sunita Aggarwal

Case Details

Case Name: Canara Bank vs. Ms. Sunita Aggarwal

Parties: Petitioner/Financial Creditor - Canara Bank; Respondent/Personal Guarantor - Ms. Sunita Aggarwal; Resolution Professional/Applicant - Mohammad Khalid

Court/Authority: National Company Law Tribunal (NCLT), Principal Bench

Case Numbers: IA-598/2025 in CP No. IB 695(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 12.11.2024

Parties Involved

Petitioner: Canara Bank (Lead bank of consortium)

Respondent: Ms. Sunita Aggarwal (Personal Guarantor)

Corporate Debtor: M/s Allied Strips Limited

Resolution Professional: Mr. Mohammad Khalid (IBBI/IPA-002/IP-N01289/2024-25/14417)

Other Guarantors: Mr. Mohinder Kumar Aggarwal and Mr. Gaurav Aggarwal

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

Issues / Allegations / Violations

• The Corporate Debtor, Allied Strips Limited, availed various credit facilities from a consortium of five banks led by Canara Bank, with total facilities 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 Ms. Sunita Aggarwal vide guarantee deeds dated 30.11.2011 and 30.12.2013.
• The Corporate Debtor defaulted in repayment obligations, leading to classification as Non-Performing Asset (NPA) 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.
• The personal guarantor, Ms. Sunita Aggarwal, failed to honor her guarantee obligations for the outstanding debt of ₹1,295,23,29,130/- (One Thousand Two Hundred Ninety-Five Crores Twenty-Three Lakhs Twenty-Nine Thousand One Hundred & Thirty Only).

Findings & Observations

• The Resolution Professional determined that there is a clear debt due and payable by the personal guarantor under the guarantee agreements dated 30.11.2011 and 30.12.2013.
• The Adjudicating Authority found the application complete in all respects under Section 95 of IBC.
• The debt has become due and remains unpaid, evidenced by NPA classification, SARFAESI notices, DRT recovery order (OA No. 630/2017, judgment dated 06.12.2019), and disposal of CIRP proceedings of Corporate Debtor with resolution plan approval on 02.12.2022.
• The Personal Guarantor did not deny liability or object to the initiation of proceedings.
• All conditions under Section 100(1) of IBC were satisfied: application is complete, debt is due and payable by guarantor, and guarantor has not repaid the debt.

Penalties / Settlements / Directions

• The application under Section 95(1) is admitted and Insolvency Resolution Process against the Personal Guarantor is initiated.
• Interim Moratorium under Section 96(1) ceases to have effect.
• Fresh moratorium under Section 101 declared for 180 days or until order under Section 114 is passed, whichever is earlier.
• During moratorium: pending legal actions/proceedings in respect of any debt are stayed; creditors cannot initiate legal actions/proceedings; debtor cannot transfer, alienate, encumber or dispose of any assets.
• Financial Creditor ordered to deposit ₹1,00,000/- with the Resolution Professional to meet expenses for public notice and claims invitation.

Corrective Actions & Future Obligations

• Resolution Professional directed to publish public notice within 7 days of order upload on NCLT website, inviting claims from all creditors within 21 days.
• Publication to be made in one English and one Vernacular newspaper with wide circulation in the state where Personal Guarantor resides.
• Resolution Professional to prepare list of creditors within 30 days from notice date.
• Debtor to prepare Repayment Plan in consultation with Resolution Professional, including provisions for payment of RP fees.
• Resolution Professional to submit Repayment Plan with report to Adjudicating Authority within 21 days from last date of claims submission.
• Resolution Professional to submit status report every 30 days before the Tribunal.
• Registry to communicate copy of order, report, and application to all concerned within 7 working days and upload immediately.
• Copy of order to be sent to IBBI by Registry.

Final Ruling & Enforcement

• IA No. 598/2025 is allowed and disposed of.
• Insolvency Resolution Process stands initiated against the Personal Guarantor/Respondent.
• Matter listed for status report by Resolution Professional on 14.07.2026.