Authority: National Company Law Tribunal, Ahmedabad Bench (Court-II)

Order Date: 15 July 2026

Case Overview

The applicants, Vikram Ashok Kapasi, Ashok Mansukhlal Kapasi, and Arun Mansukhlal Kapasi (erstwhile promoters/directors/guarantors of Techno Forge Limited), filed an application under Section 60(5) and 74(3) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the NCLT Rules, 2016, against Bank of India (Respondent No. 1) and the Chairperson of the Monitoring Committee of Techno Forge Limited (Respondent No. 2).

The Corporate Debtor, Techno Forge Limited (an MSME), underwent Corporate Insolvency Resolution Process (CIRP) pursuant to an order dated 2 July 2020. The applicants submitted the sole resolution plan, which was approved by the Committee of Creditors (CoC) with 89.11% voting share (Bank of India held 89.11% and Paisalo Digital Limited held 10.89%). The approved resolution plan dated 12 October 2021 with addendum dated 26 October 2021 specifically provided that upon payment of the entire resolution amount, all personal guarantees furnished by the applicants would stand released and a No Due Certificate would be issued.

The applicants fully implemented the plan by paying the entire resolution amount of Rs. 9,00,00,000 (9 crore) along with interest of Rs. 30,48,813 on 3 September 2025. Bank of India issued a No Due Certificate dated 1 November 2025. However, the bank subsequently demanded an additional payment of Rs. 22 lakhs for release of the personal guarantees and mortgaged property, citing its internal sanction memorandum and policy.

The dispute regarding the release of personal guarantees had previously been subject to litigation. The NCLT's initial approval order dated 2 February 2024 had modified the guarantee release clause, but the National Company Law Appellate Tribunal (NCLAT) set aside this modification in its order dated 5 January 2026 (Company Appeal (AT) (Ins.) No. 643 of 2024). The applicants subsequently sought clarification from NCLAT regarding guarantee release, which was provided on 17 March 2026, confirming that the portion of the NCLT order rejecting the release clause stood set aside.

Final Outcome

The NCLT allowed the application (IA No. 176 of 2026) and directed Bank of India to:

1. Fully comply with and implement the final resolution plan dated 12 October 2021 along with addendum dated 26 October 2021.

2. Release and discharge the personal guarantees furnished by the applicants without insisting on any additional payment (specifically the Rs. 22 lakhs demand).

3. Release the mortgaged property of Applicant No. 2 (Flat No. B/4 in Nand Cooperative Housing Society Limited, Vadodara).

4. Pay litigation costs of Rs. 1,00,000 to the applicants for unnecessarily dragging them into litigation.

The tribunal held that the bank's demand for additional payment was contrary to the binding resolution plan that it had approved, and that the bank was estopped from relying on its internal policy after agreeing to the plan terms.

Topics: Insolvency Resolution, Personal Guarantees, Banking Compliance