Authority: National Company Law Tribunal Principal Bench, New Delhi

Order Date: 12 June 2026

Case Overview

The National Company Law Tribunal (NCLT) Principal Bench heard a petition filed by IDBI Bank Limited under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Personal Insolvency Resolution Process (PIRP) against Smt. Sucheta Sudhir Modak, who served as a personal guarantor for loans extended to M/s SMS Paryavaran Ltd (Corporate Debtor).

The financial relationship began with a Working Capital Limit of ₹20 crore sanctioned on 21 August 2010, which was subsequently enhanced to ₹33 crore on 20 May 2013 and eventually became part of a consortium lending arrangement totaling ₹149 crore. The respondent executed multiple personal guarantee agreements dated 23 September 2010, 20 May 2013, 8 May 2014, 3 July 2015, 1 August 2015, and 5 April 2016, and mortgaged several immovable properties as security.

The Corporate Debtor's account was classified as Non-Performing Asset on 28 February 2018. IDBI Bank issued recall notices on 24 May 2018, guarantee invocation notices on 15 June 2018, and SARFAESI notices on 27 June 2018. The Corporate Debtor underwent Corporate Insolvency Resolution Process (CIRP) initiated by ICICI Bank, which was admitted on 3 January 2020, and a resolution plan was approved on 21 February 2023, wherein IDBI Bank received ₹4.30 crore as partial satisfaction of its dues.

The tribunal addressed three key issues: (1) whether the petition was filed within limitation period, finding that multiple OTS proposals between 2020-2023 constituted fresh acknowledgements under Section 18 of Limitation Act; (2) whether guarantees were validly invoked, concluding that continuing guarantees remained enforceable despite the corporate resolution plan; and (3) whether invocation was premature, determining that the ongoing implementation of the corporate resolution plan did not restrict the bank's rights against the personal guarantor.

Final Outcome

The NCLT admitted the petition and initiated Insolvency Resolution Process against the personal guarantor. A fresh moratorium under Section 101 was declared for 180 days. Resolution Professional Mr. Rahul Jindal was directed to publish public notices, invite claims from creditors, prepare a list of creditors, and facilitate preparation of a repayment plan. The financial creditor was ordered to deposit ₹1,00,000 with the RP for expenses, and the respondent was directed to disclose complete asset and liability details, including Income Tax Returns for 2023-24 and 2024-25, within two weeks.

Topics: Personal Guarantee Insolvency, Bank Debt Recovery, NCLT Proceedings