Case Overview

This order pertains to Company Petition CP(IB)/20(MP)/2023, an application filed by IDBI Bank Limited (Financial Creditor) under Section 95 of the Insolvency and Bankruptcy Code, 2016 (IBC), read with the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019. The application sought the initiation of a Personal Insolvency Resolution Process (PIRP) against Shri Niraj Jayantilal Mehta (Respondent/Personal Guarantor).

The Financial Creditor, IDBI Bank, had sanctioned credit facilities totaling Rs. 40 Crores (Term Loan of Rs. 35 Crores and Cash Credit of Rs. 5 Crores) to M/s Navsan Glass Industries Limited (Corporate Debtor) on 11.11.2009. The Respondent, a director of the Corporate Debtor, executed a Deed of Personal Guarantee on 09.03.2010, binding himself co-extensively for repayment.

The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) on 30.09.2011. Despite a part payment of Rs. 5.08 Crores from the Corporate Debtor and a recovery of Rs. 2.26 Crores by the Bank through SARFAESI action (sale of mortgaged land on 05.01.2021), the total outstanding dues amounted to Rs. 70,75,30,451.84/- as of 02.03.2022 (Principal: Rs. 16,40,37,137.84; Interest: Rs. 54,34,93,314).

The debt was acknowledged via a Revival Letter dated 18.01.2013 and a separate Acknowledgement of Debt dated 08.02.2013. The guarantee was formally invoked on 27.12.2013. IDBI Bank obtained a decree from the Debt Recovery Tribunal-III, Mumbai, in Original Application No. 138 of 2014 on 10.05.2018, followed by a Recovery Certificate (RC No. 117/2019) for Rs. 21,32,34,009/- issued on 06.09.2019 against the Corporate Debtor and the Personal Guarantor.

A separate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Navsan Glass Industries Limited, was admitted by the NCLT vide order dated 04.11.2025 in CP(IB) No. 63(MP) of 2022.

A statutory Demand Notice in Form B was issued to the Personal Guarantor on 17.08.2022, which went unpaid, leading to the filing of this application on 31.01.2023. The Respondent failed to appear or file a reply despite personal notice and subsequent substituted service via publication in four newspapers (Indian Express, Fresh Press Journal, Nav Shakti, City Vadodara) on 02.12.2025.

The Tribunal appointed Shri Parag Sheth (IBBI/IPA-002/IP-N00142/2017-18/10381) as the Resolution Professional (RP) on 05.08.2024. The RP issued notices to the Respondent, who replied via email on 20.08.2024 stating "beyond this we have not made any payments." The RP submitted his report under Section 99 of the IBC on 31.08.2024, recommending acceptance of the application and initiation of PIRP.

The Applicant's key submissions were that the application was within limitation, citing the date of default as 06.09.2019 (issuance of Recovery Certificate) and the exclusion of the COVID-19 period (15.03.2020 to 28.02.2022) as per Supreme Court directions, making the filing date of 31.01.2023 well within the extended limitation period of approximately 15.08.2024. It was also argued that the liability of the guarantor is co-extensive with the principal debtor under Section 128 of the Indian Contract Act, 1872.

Final Outcome

The NCLT admitted the application under Section 100 of the IBC. The Personal Insolvency Resolution Process (PIRP) against Shri Niraj Jayantilal Mehta (DOB: 19.07.1975, PAN: AGKPM4649R) is initiated with immediate effect.

Shri Parag Sheth is confirmed as the Resolution Professional to conduct the PIRP. A moratorium under Section 101 of the IBC comes into force immediately and will remain operative for 180 days or until the approval of a repayment plan, whichever is earlier.

The Resolution Professional is directed to cause a public announcement within three days. The Financial Creditor is directed to deposit Rs. 1,00,000/- to the RP's account as fees. The Respondent/Personal Guarantor is mandated to submit a Statement of Affairs to the RP. The RP must submit a status report to the Tribunal within 30 days.

Topics: Personal Guarantor Insolvency, Debt Recovery, NCLT Proceeding