Vibu Venkatsubramanian Vs State Bank of India (NCLAT Delhi)
The appeal was filed by the Personal Guarantor (PG) against the order of the National Company Law Tribunal (NCLT), Principal Bench, New Delhi, dated 22.03.2024 admitting an application under Section 95 of the Insolvency and Bankruptcy Code, 2016 (IBC) and initiating the insolvency resolution process against him. The Resolution Professional’s report submitted under Section 99 of the IBC recommending initiation of insolvency proceedings had been accepted by the NCLT. The Corporate Debtor had availed credit facilities of ₹42 crore from the State Bank of India (SBI), and the appellant had executed deeds of personal guarantee in connection with those facilities. The Corporate Debtor subsequently underwent Corporate Insolvency Resolution Process (CIRP) following admission of a Section 7 application. After issuing a demand notice in Form B and upon failure of the Personal Guarantor to pay, SBI filed the application under Section 95. The NCLT held that the application was within limitation, the guarantee remained enforceable, and debt and default had been established.
Before the Appellate Tribunal, the appellant contended that he had executed a guarantee only in relation to the original facilities sanctioned in 2012 and had neither executed nor renewed any guarantee for subsequent sanction letters issued in 2016, 2017 and 2018. It was argued that the subsequent sanction letters constituted fresh contracts resulting in novation, that the earlier guarantee did not extend to the renewed facilities, and that any claim based on the original guarantee had become barred by limitation in the absence of a revival letter executed by the appellant. The appellant also alleged forum shopping by SBI and submitted that the Resolution Professional had exceeded the limited role contemplated under Section 99 of the IBC by making adjudicatory determinations instead of merely conducting due diligence. Relying on Dilip B. Jiwrajka v. Union of India, the appellant argued that the NCLT had erred in admitting the application.
