Authority: National Company Law Tribunal (NCLT) Principal Bench, New Delhi

Order Date: 12 June 2026

Case Overview

The petition was filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) by IDBI Bank Limited (Financial Creditor) seeking to initiate a Personal Insolvency Resolution Process (PIRP) against Smt. Parbati Sengupta (Respondent/Personal Guarantor). The guarantor had provided personal guarantees for financial facilities availed by M/s SMS Paryavaran Ltd. (Corporate Debtor).

The financial relationship began with a sanction of a Working Capital Limit of ₹20.00 crore on 21 August 2010. This was enhanced to ₹33.00 crore on 20 May 2013 and later became part of a consortium lending arrangement totaling ₹149.00 crore. The facilities were subsequently restructured multiple times, culminating in a Master Restructuring Agreement (MRA) dated 05 April 2016 for ₹125.51 crore, with IDBI Bank's share being ₹35.25 crore.

The Respondent executed a series of Personal Guarantee deeds dated 23.09.2010, 20.05.2013, 08.05.2014, 03.07.2015, 01.08.2015, and 05.04.2016. She also mortgaged immovable properties, including a shop in Gurgaon and a plot in Rohini, Delhi, and an agricultural property in Village Silana, Tehsil Jhajjar, District Rohtak, Haryana.

The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) on 28 February 2018. A Recall Notice was issued on 24 May 2018, followed by Guarantee Invocation Notices on 15 June 2018 and a SARFAESI notice under Section 13(2) on 27 June 2018.

A Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor was admitted by the NCLT on 03 January 2020 (CP (IB) No. 1935 of 2019). A resolution plan was approved on 21 February 2023, under which IDBI Bank received ₹4.30 crore, only partially satisfying its dues. The plan specifically stated that personal guarantees would continue to be held by financial creditors until full implementation.

Despite several One-Time Settlement (OTS) proposals submitted between 2020 and 2023 (the last on 06 November 2023), none were accepted. A final Demand Notice under Rule 7(1) of the Personal Guarantor Rules, 2019, for an outstanding amount of ₹67,70,47,092.82 (as of 05 June 2024) was issued on 15 June 2024. As the debt remained unpaid, the petition was filed.

The tribunal appointed Mr. Rahul Jindal (IBBI Reg. No. IBBI/IPA-001/IP-P-02649/2021-2022/14048) as the Resolution Professional (RP) on 13 December 2024. The RP submitted a report under Section 99 of the Code (via IA-554/2025) recommending admission of the petition. The Respondent initially objected but later filed an affidavit on 28 March 2026 stating she had no objection to the initiation of PIRP.

The key legal issues determined were: (1) The petition was within limitation due to a series of OTS proposals constituting acknowledgements under the Limitation Act, and a specific clause in the guarantee deeds binding the guarantor to acknowledgements made by the borrower; (2) The guarantee was validly invoked, and a default was established based on the NPA classification, recall notices, and the unpaid demand notice; (3) The invocation was not premature. The approved resolution plan for the corporate debtor expressly stipulated that personal guarantees would subsist until complete implementation and full payment, which had not occurred.

Final Outcome

The NCLT admitted the petition under Section 95(1) of the IBC and initiated the Insolvency Resolution Process against the Personal Guarantor, Smt. Parbati Sengupta. The interim moratorium under Section 96(1) ceased, and a fresh moratorium under Section 101 was declared for 180 days or until an order under Section 114 is passed. Mr. Rahul Jindal is confirmed as the Resolution Professional and is directed to publish a public notice, invite claims, and proceed with the process as outlined in the Code. The Financial Creditor was ordered to deposit ₹1,00,000 with the RP for expenses. The Respondent was directed to cooperate fully with the RP and disclose complete details of her assets, liabilities, and IT returns for 2024 and 2025 within two weeks.

Topics: Personal Guarantor Insolvency, Debt Recovery, NCLT Adjudication