Authority: National Company Law Tribunal (NCLT), Kochi Bench

Order Date: 17 June 2026

Case Overview

The South Indian Bank Ltd (Financial Creditor) filed three petitions (CP(IB)/12/KOB/2026, CP(IB)/13/KOB/2026, and CP(IB)/14/KOB/2026) under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, read with relevant rules. The petitions sought to initiate the insolvency resolution process against three individuals: Mr. Thomas J. Vayalat, Mr. Joseph Thomas Vayalat, and Mrs. Elizabeth Thomas, who are Personal Guarantors for the Corporate Debtor, M/s Veeteejay Motors Private Limited. The petitions relate to a consolidated default involving a debt amounting to Rs. 17,82,33,625.95 (approx. ₹17.82 crore) as of 22 May 2026, with future interest.

The debt arose from credit facilities availed by the Corporate Debtor, M/s Veeteejay Motors Pvt. Ltd, which included a Cash Credit facility of Rs. 400 Lakhs (CC-1), a Working Capital Term Loan of Rs. 750 Lakhs (WCTL-1), an SIBML Overdraft facility of Rs. 200 Lakhs (OD-1), a Term Loan (FSL General) of Rs. 175 Lakhs (TL-1), and a Working Capital Term Loan of Rs. 2,38,19,808/- (TL-2). The Respondents had also stood as guarantors for another entity, M/s. Veeteejay Mobikes Pvt. Ltd., for a Cash Credit facility of Rs. 50 Lakhs (CC-2), a Working Capital Term Loan of Rs. 225 Lakhs (WCTL-2), and an SIBML Dropline Overdraft facility of Rs. 100 Lakhs (OD-2).

The credit facilities for M/s. Veeteejay Motors Pvt. Ltd. were classified as a Non-Performing Asset (NPA) on 06 September 2023, and those for M/s. Veeteejay Mobikes Pvt. Ltd. were classified as an NPA on 12 September 2023. The Bank issued loan recall notices and invoked the personal guarantees on 21 September 2023 (and 27 September 2023 for Mobikes). It also initiated recovery under the SARFAESI Act, filing OA 528/2024 before DRT-I, Ernakulam, on 23 March 2024, for recovery of ₹28,01,58,941.33. A One-Time Settlement (OTS) for ₹37.00 Crores was sanctioned but lapsed after only ₹19 Crores was paid. The Bank served the mandatory demand notice in Form B on the Personal Guarantors on 13 March 2026, demanding ₹17,22,57,712.20 as of 28 February 2026.

The Tribunal, citing the Supreme Court's judgment in Dilip B Jiwrajka Vs. Union of India & Ors., noted that no judicial adjudication on merits occurs at this stage (Sections 95-99 of IBC). The Resolution Professional's role is facilitative and recommendatory. Counsel for the Respondents reserved their right to raise all objections after the submission of the RP's report.

The Adjudicating Authority was prima facie satisfied that the threshold requirements under Section 95 of the Code pertaining to debt, default (exceeding ₹1 crore), and limitation (date of default being September 2023) were met.

Final Outcome

The petitions were allowed. An interim moratorium under Section 96 of the IBC commenced immediately, staying all legal actions and proceedings concerning the debts of the Personal Guarantors. Mr. Jasin Jose (IBBI/IPA-001/IP-P00695/2017-2018/11225) was appointed as the Resolution Professional (RP). The Petitioner/Creditor was directed to make an advance payment of Rs. 1,00,000/- to the RP. The RP is directed to examine the application and submit a report to the Adjudicating Authority within 21 days, recommending either approval or rejection of the application. The matter is listed for further consideration on 13 July 2026.

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