Case Details

Case Name: Karur Vysya Bank vs. Chand Kumar Goyal

Court/Authority: National Company Law Tribunal, New Delhi Bench (Court-II)

Case Number: IA. No. 968/ND/2025 in Company Petition No. (IB)-414/ND/2022

Date of Order: 22.05.2026

Period of Violation/Dispute: Loan guarantee executed on 12.06.2015; account classified as NPA on 13.02.2019; demand notice issued on 07.04.2022.

Parties Involved

Petitioner/Financial Creditor: Karur Vysya Bank Ltd, represented by its Chief Manager from Asset Recovery Branch, New Delhi.

Respondent/Personal Guarantor: Mr. Chand Kumar Goyal, S/o Shri Prem Sagar Goyal, resident of New Delhi.

Insolvency Professional/Bankruptcy Trustee: Mr. Santosh Goel (IBBI Registration No: IBBI/IPA-001/IP-P00823/2017-2018/11399).

Corporate Debtor: M/s Giriraj Timber Private Limited.

Legal Representatives: Adv. Iswar Mohapatra, Adv. Markandey Kr. Singh, and Adv. Animesh Pandey for the Applicant.

Issues / Allegations / Violations

  • Mr. Chand Kumar Goyal executed a Deed of Guarantee on 12.06.2015 in favor of Karur Vysya Bank, guaranteeing loan facilities of ₹51,00,00,000 (₹51 crore) for M/s Giriraj Timber Private Limited.
  • The corporate debtor's account was classified as a Non-Performing Asset (NPA) on 13.02.2019.
  • The bank issued a notice under Section 13(2) of the SARFAESI Act on 20.02.2019 to recall the guarantee obligations.
  • The personal guarantor proposed a One Time Settlement (OTS) of ₹21.50 crore on 23.02.2021, payable in three tranches (₹0.50 crore by 31.03.2021, ₹16 crore by 25.06.2021, and ₹5 crore by 25.09.2021), but failed to pay.
  • The bank issued a formal demand notice under Rule 7(1) on 07.04.2022, which the guarantor did not comply with.

Findings & Observations

  • The Tribunal found that all requirements under Chapter III of Part III of the Insolvency and Bankruptcy Code, 2016 (IBC) were duly complied with.
  • The personal guarantor was given adequate opportunity but failed to avail the statutory mechanism of submitting a repayment plan under Section 105(1) of the IBC.
  • The Insolvency Professional had filed reports under Sections 99, 112, and 113 of the IBC, recommending admission of the application.
  • The Tribunal had previously commenced the personal insolvency resolution process and declared a moratorium under Section 101 via order dated 23.01.2024.
  • Non-submission of a repayment plan was deemed to entail consequences akin to rejection of the plan, as per order dated 29.11.2024.

Penalties / Settlements / Directions

  • Mr. Chand Kumar Goyal is declared bankrupt.
  • Mr. Santosh Goel is appointed as Bankruptcy Trustee under Section 125 of the IBC.
  • The bankruptcy order will continue until the bankrupt is discharged under Section 138 of the IBC.
  • The bankrupt must submit his statement of financial position to the Bankruptcy Trustee in prescribed Form within seven days from the order date.
  • The estate of the bankrupt (excluding assets under Section 155(2) of IBC and Rule 5 of relevant Rules) vests with the Bankruptcy Trustee under Sections 128 and 154.
  • The bankrupt is subject to disqualifications and restrictions under Sections 140 and 141 of the IBC.

Corrective Actions & Future Obligations

  • The Bankruptcy Trustee must take custody and control of all assets, properties, and actionable claims of the bankrupt for preservation, protection, security, and maintenance.
  • The Trustee must adhere to provisions of Sections 128, 129(4), 132, 133, 134, 135, 136, 137, 149, 150, 151, 152, 157, 159, 164, 165, 166, and 167 of the IBC.
  • The Trustee must issue a public notice under Section 130(1)(a) within ten days to creditors mentioned in the statement of affairs and the application.
  • Public notice must be published in two leading newspapers (one English, one vernacular) at the bankrupt's residence.
  • The Trustee must submit a preliminary report to the Tribunal within ninety days.
  • The Trustee must submit quarterly progress reports within fifteen days after each quarter ends.
  • The Trustee's fee will be determined as per Regulation 4 of the Insolvency and Bankruptcy Board of India (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019.

Final Ruling & Enforcement

  • IA No. 968/ND/2025 is admitted and disposed of.
  • No action can be initiated against the bankrupt's property for any debt, and no suit or legal proceeding can be initiated against the bankrupt without leave of the Adjudicating Authority under Section 128(1)(c).
  • The Registry must provide copies of the order and bankruptcy petition to creditors and the Bankruptcy Trustee within one week under Section 126(2).
  • The Bankruptcy Trustee may call for further information or explanation from the debtor, creditor, or any other person, who must furnish it within seven days of request.