Gaurav Bhalla Vs Beacon Trusteeship Limited (NCLAT Delhi)
The appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) challenged the order dated 09.04.2026 of the NCLT, New Delhi Bench-II, admitting an application under Sections 95(1) and 95(2) of the IBC for initiation of the Personal Insolvency Resolution Process (PIRP) against the appellant as a Personal Guarantor. The application had been filed by the Debenture Trustee after the Resolution Professional submitted a report under Section 99 recommending admission.
The factual background showed that the Corporate Debtor raised funds through issuance of Optionally Convertible Debentures aggregating to ₹500 crore, executed a Debenture Trust Deed (DTD), and the appellant executed a Deed of Personal Guarantee (DPG) securing the obligations under the debenture issuance. Following amendments to the DTD, the debenture holder exercised the put option, demanding ₹1,258.73 crore. Upon non-payment, the Debenture Trustee issued demand notices to the Corporate Debtor and the appellant, followed by a statutory demand notice under the Personal Guarantor Rules. After the appellant disputed the debt and the Debenture Trustee’s locus, an application under Section 95 was filed, a Resolution Professional was appointed, and the Adjudicating Authority subsequently admitted the proceedings.
The appellant contended that the Section 95 proceedings were not maintainable due to the absence of a valid and enforceable personal guarantee. It argued that the guarantee initially annexed with the application belonged to another individual, and even the subsequently produced guarantee contained the name “Gautam Bhalla” instead of the appellant in Schedule I. According to the appellant, these defects could not be cured within proceedings under Section 95 and required rectification under law. The appellant further submitted that the Resolution Professional failed to independently examine these defects, wrongly recommended admission, failed to properly address the disputed date of default, and accepted erroneous documents. It was also argued that only a creditor could file an application under Section 95 and that a Debenture Trustee lacked statutory locus to initiate such proceedings.
