Authority: National Company Law Tribunal, Indore Bench (Court No. 1)

Order Date: 08/06/2026

Case Overview

The petition was filed by IDBI Bank Limited under Section 95 of the Insolvency and Bankruptcy Code, 2016, read with the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019. The Financial Creditor (IDBI Bank) sought initiation of the Personal Insolvency Resolution Process (PIRP) against Shri Umesh Jayantilal Mehta, who acted as a personal guarantor for corporate debtor M/s Navsan Glass Industries Limited (CIN: U26101MP2009PLC021885).

The corporate debtor had availed credit facilities totaling ₹40 crores (₹35 crores Term Loan and ₹5 crores Cash Credit) from IDBI Bank vide sanction letter dated 11.11.2009. The respondent executed a Deed of Personal Guarantee on 09.03.2010, binding himself co-extensively for repayment. The account was classified as NPA on 30.09.2011. Despite part payments totaling ₹5.08 crores and recovery of ₹2.26 crores through SARFAESI action (e-auction on 05.01.2021), the total outstanding dues stood at ₹70,75,30,451.84 as of 02.03.2022 (principal: ₹16,40,37,137.84; interest: ₹54,34,93,314).

The corporate debtor acknowledged the debt through a Revival Letter dated 18.01.2013 and separate Acknowledgement of Debt and Confirmation of Security dated 08.02.2013. IDBI Bank issued a Recall Notice on 28.02.2013 and formally invoked the personal guarantee on 27.12.2013. Due to continued default, the bank filed OA No. 138 of 2014 before DRT-III, Mumbai, which decreed the matter on 10.05.2018. A Recovery Certificate (RC No. 117/2019) was issued on 06.09.2019 for ₹21,32,34,009 against both the corporate debtor and the respondent.

Separately, the corporate debtor underwent Corporate Insolvency Resolution Process (CIRP) admitted by NCLT vide order dated 04.11.2025 in CP (IB) No. 63 (MP) of 2022. IDBI Bank issued a statutory Demand Notice in Form B under Rule 7(1) to the respondent on 17.08.2022, which went unanswered, leading to the filing of this petition on 31.01.2023.

The respondent failed to appear despite notice issuance on 10.02.2023 and subsequent substituted service via publication in four newspapers (Fresh Press Journal, Nav Shakti, and two others) on 02.12.2025 as directed by the tribunal on 15.10.2025. The tribunal appointed Shri Parag Sheth (IBBI/IPA-002/IP-N00142/2017-18/10381) as Resolution Professional vide order dated 05.08.2024. The RP submitted his report under Section 99 on 31.08.2024 (taken on record on 12.11.2024), recommending admission after confirming compliance with Sections 95 and 99 requirements.

The tribunal analyzed the application's limitation status, holding that the default date was 06.09.2019 (Recovery Certificate issuance). Considering the Hon'ble Supreme Court's direction in Suo Motu WP (C) No. 3 of 2020, the period from 15.03.2020 to 28.02.2022 was excluded due to COVID-19, making the petition filed on 31.01.2023 well within the extended limitation period (up to approx. 15.08.2024).

Final Outcome

The tribunal admitted the petition under Section 100 IBC and initiated the Personal Insolvency Resolution Process against Shri Umesh Jayantilal Mehta (DOB: 08.02.1968, PAN: AANPM8083G). Shri Parag Sheth was confirmed as Resolution Professional. A moratorium under Section 101 IBC was declared effective from the order date. The RP was directed to cause public announcement within three days. IDBI Bank was directed to deposit ₹1,00,000 towards RP fees. The respondent must submit a Statement of Affairs to the RP, who must file a status report with the tribunal within 30 days.

Topics: Personal Guarantor Insolvency, Debt Recovery, NCLT Proceedings