Case Details

Case Name: Pawan Gupta vs M/s. Charm Investments Pvt. Ltd. & Anr.

Court/Authority: National Company Law Appellate Tribunal, Principal Bench, New Delhi

Case Number: Company Appeal (AT) (Insolvency) No. 374 of 2026

Date of Judgment: 29th May, 2026

Date of Impugned Order: 04.02.2026

Period of Dispute: Loan originated 18.11.2011, NPA classified 31.12.2019, proceedings initiated 2026

Parties Involved

Appellant: Mr. Pawan Gupta, S/o. Late Sh. Munna Lal Gupta, resident of C-19, Rana Pratap Bagh, Delhi – 110007

Respondent No. 1: M/s. Charm Investments Pvt. Ltd. through Ms. Nandini Mittal, Registered Office: 9982, Ahata Thakur Das, Sarai Rohila, New Delhi – 110005 (Financial Creditor/Assignee)

Respondent No. 2: Mr. Pradeep Kumar Kaushik, Resolution Professional for Mr. Pawan Gupta, resident of Flat No. 384, 2nd Floor, Pocket 5, Mayur Vihar Phase-I, Delhi – 110091

Corporate Debtor: M/s. L.R. Builders Pvt. Ltd. (part of PP Jewellers Group)

Original Lender: Union Bank of India

Intermediate Assignee: M/s. Rishikesh Hire Purchase and Leasing Company Pvt. Ltd.

Issues / Allegations / Violations

  • Financial Creditor (Charm Investments) initiated insolvency proceedings under Section 95 of IBC against Appellant portraying him as "personal guarantor" to corporate debtor L.R. Builders Pvt. Ltd.
  • Appellant contended he was merely a "co-borrower" and not a "personal guarantor," with sanction documents explicitly recording "Guarantors: NIL"
  • Fundamental jurisdictional issue: Whether proceedings under Part III of IBC (applicable only to personal guarantors) can be initiated against a co-borrower
  • Alleged misrepresentation by Financial Creditor before NCLT by claiming existence of "Deed of Guarantee" and "Letter of Invocation" which were never executed or filed
  • Outstanding debt amount: Rs. 5,70,00,414/- (as claimed in Section 95 application)

Findings & Observations

  • Sanction letter dated 18.11.2011 from Union Bank of India expressly recorded "Guarantors: NIL"
  • Appellant and Mr. Kamal Gupta were consistently described as "co-borrowers" in all loan documents and DRT proceedings
  • Both assignment agreements (Union Bank to Rishikesh Hire Purchase, and Rishikesh to Charm Investments) specifically recorded "Guarantors: Nil"
  • Demand notice dated 10.01.2026 and Section 95 application did not list "Deed of Guarantee" or "Invocation Letter" among supporting documents
  • Financial Creditor admitted in I.A. No. 958 of 2026 that no Deed of Guarantee or Letter of Invocation was placed on record
  • NCLT expressed dissatisfaction about "manner in which case has been conducted and represented before this Adjudicating Authority by placing incorrect facts" in order dated 03.03.2026
  • Tribunal applied Supreme Court precedent in A.V. Papayya Sastry vs. Government of A.P. that orders obtained by fraud/misrepresentation can be set aside at any stage

Penalties / Settlements / Directions

  • Impugned order dated 04.02.2026 passed by NCLT New Delhi Bench-III set aside and declared void ab initio
  • All pending IAs closed
  • No costs awarded
  • Financial Creditor granted liberty to file fresh application under Section 95 of IBC with all relevant documents

Corrective Actions & Future Obligations

  • Resolution Professional directed to cease all further steps in the matter (as per NCLAT's interim order dated 27.02.2026)
  • Financial Creditor must provide complete and accurate documentation if pursuing fresh application
  • No specific compliance measures or governance reforms ordered as the proceedings were terminated

Final Ruling & Enforcement

  • NCLAT allowed the appeal and set aside the impugned order dated 04.02.2026
  • Found that NCLT's findings were vitiated by misrepresentation of jurisdictional facts by Financial Creditor
  • Declaration that impugned order is void ab initio
  • Liberty granted to Financial Creditor to file fresh application with proper documentation