NCLT Allahabad Admits Personal Guarantor Insolvency Plea Without NeSL Record Under Section 95 IBC

In Siemens Financial Services Private Limited Vs Rasik Khandelwal, the National Company Law Tribunal, Allahabad Bench, admitted an application under Section 95 of the Insolvency and Bankruptcy Code, 2016 and initiated the Personal Insolvency Resolution Process (PIRP) against the personal guarantor of Rasik Products Private Limited. The Tribunal held that a record from an information utility (NeSL) is not a precondition for such an application.

The application

The application (CP (IB) No. 79/ALD/2024) was filed on 19.04.2024 under Section 95 read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantor to Corporate Debtor) Rules, 2019. The claimed debt was Rs. 3,81,04,993/-. The default was described as continuing from September 2023, the accounts were classified as NPA on 14.12.2023, and Part III of the application gave the date of default as 14.12.2023. Jurisdiction was founded on Section 60(3), since the guarantor and the corporate debtor were located in Mathura.

Four secured facilities were involved: Secured Loan 1 (Rs. 3,65,11,956/-) and Secured Loan 2 (Rs. 84,88,404/-) sanctioned on 31.01.2022 under Finance Agreements A9813943 and A9814174; Secured Loan 3 (Rs. 1,30,00,000/-) sanctioned on 22.09.2022 under Agreement A9874677; and Secured Loan 4 (Rs.70,00,000/-) sanctioned on 14.11.2022 under Agreement A9985776. Clause 11 of the agreements contained an unconditional and irrevocable guarantee, making the guarantor jointly and severally liable, with liability co-extensive with the borrower's and enforceable regardless of other security.