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, 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 to the corporate debtors, M/s Veeteejay Motors Private Limited and M/s Veeteejay Mobikes Pvt. Ltd.
The principal dispute concerns a default on a debt amounting to ₹17,82,33,625.95 (as of 22 May 2026). The corporate debtors had availed multiple credit facilities from the bank, including a Cash Credit facility of ₹400 lakhs, a Working Capital Term Loan of ₹750 lakhs, an Overdraft facility of ₹200 lakhs, a Term Loan of ₹175 lakhs, and another Working Capital Term Loan of ₹2,38,19,808. The guarantors also stood guarantee for another entity, M/s Veeteejay Mobikes Pvt. Ltd., for a Cash Credit facility of ₹50 lakhs, a Working Capital Term Loan of ₹225 lakhs, and an Overdraft facility of ₹100 lakhs.
The credit facilities were secured by personal guarantees, and relevant documents, including sanction letters and guarantee agreements dated 16.10.2017, 09.11.2021, and 25.03.2021, were executed. The account of M/s Veeteejay Motors Pvt. Ltd. was classified as a Non-Performing Asset (NPA) on 06.09.2023, and the account of M/s Veeteejay Mobikes Pvt. Ltd. was classified as an NPA on 12.09.2023. The bank issued loan recall notices and invoked the guarantees on 21.09.2023 and 27.09.2023. It also initiated recovery under the SARFAESI Act, filing OA 528/2024 before DRT-I, Ernakulam, on 23.03.2024, for recovery of ₹28,01,58,941.33 (as of 22.03.2024).
An One-Time Settlement (OTS) was sanctioned for ₹37.00 Crores, which included the settlement of connected accounts. The guarantor executed a Debt Settlement Terms agreement on 17.12.2024. However, only ₹19 Crores was remitted, causing the OTS to lapse. The bank served a demand notice in Form B on 13.03.2026, demanding ₹17,22,57,712.20 (as of 28.02.2026). The petition was filed on 11.06.2026, which was within the limitation period starting from the NPA classification date.
The tribunal, referencing 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 respondent's counsel reserved the right to raise all objections after the report of the Resolution Professional (RP). The tribunal found the threshold requirements of debt, default, and limitation under Section 95 were prima facie met.
Final Outcome
The petitions were allowed. An interim moratorium under Section 96 of the IBC commenced from the petition filing date (11.06.2026). Mr. Jasin Jose (IBBI/IPA-001/IP-P00695/2017-2018/11225) was appointed as the Resolution Professional. The Financial Creditor was directed to pay an advance of ₹1,00,000 to the RP. The RP is to examine the application and submit a report to the Adjudicating Authority within 21 days, recommending approval or rejection of the application. The matter is listed for further consideration on 13.07.2026.
Topics: Personal Guarantor Insolvency, Bank Debt Recovery, NCLT Proceedings