Authority: Supreme Court of India

Order Date: 30 July 2026

Case Overview

  • Civil Appeal No. 8289/2026 filed by appellant Gajjala Yoganand against respondent M/S Catalyst Trusteeship Limited.
  • The appeal challenges the National Company Law Appellate Tribunal (NCLAT) order dated 30‑04‑2026 which rejected stay application IA No. 601/2025 in Company Appeal (AT) (CH) (Ins) No. 217/2025.
  • Appellant is a personal guarantor of a credit facility availed by Manjeera Retail Holdings Pvt. Ltd. (MRHPL‑CD). Upon MRHPL’s default, the respondent, as assignee creditor, initiated a personal insolvency resolution process under Section 95 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the appellant.
  • The National Company Law Tribunal (NCLT) admitted the insolvency petition on 11‑03‑2025. The appellant subsequently filed Company Appeal No. 217/2025 before NCLAT and sought a stay of the personal insolvency proceedings; the stay application was heard on 25‑04‑2025 and the order rejecting it was reserved and finally passed on 30‑04‑2026.
  • Counsel for the appellant, senior counsel Mr. Neeraj Kishan Kaul, argued that the NCLAT order ignored material developments: (i) Manjeera Construction Ltd. (MCL) was a corporate guarantor for the same loan; (ii) Section 7 petitions were filed against both MRHPL and MCL; (iii) a resolution plan approved in the Section 7 petition against MRHPL provided for payment of the respondent’s claim, after which the respondent did not pursue its claim against MCL. Consequently, the appellant contended there was no justification for proceeding with a personal insolvency resolution against him.
  • Counsel for the respondent, senior counsel Mr. Krishnendu Datta, submitted that the respondent’s dues exceed ₹60 crore as of the date of the order and that, in the absence of a stay on the admission of the petition, a resolution professional has been appointed who has invited claims exceeding ₹300 crore. He argued that the matter does not merit Supreme Court interference with the NCLAT’s rejection of the stay.
  • The Court observed that the NCLAT order failed to discuss the subsequent developments highlighted by the appellant, possibly due to the long period the order was reserved. The Court noted this omission and decided to intervene.

Final Outcome

  • The Supreme Court set aside the NCLAT order dated 30‑04‑2026 that rejected IA No. 601/2025.
  • IA No. 601/2025 is restored on the file of Company Appeal (AT) (CH) (Ins) No. 217/2025 for fresh consideration by the NCLAT, preferably within one month from the date a copy of this order is placed before the NCLAT.
  • The appeal is allowed in the terms stated.
  • Any pending applications, if any, shall stand disposed of.

Topics: Insolvency, Stay Application