Aditya Birla Finance Pvt. Ltd. Vs G Thiyagarajan (NCLT Chennai)
The National Company Law Tribunal (NCLT), Chennai, admitted a petition filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of insolvency resolution proceedings against a personal guarantor in respect of loans extended to a corporate debtor. The Tribunal appointed Mr. Ravindra Beleyur as the Resolution Professional (RP), accepted the report submitted under Section 99 of the IBC recommending initiation of insolvency proceedings, and admitted the petition.
The financial creditor stated that loan facilities aggregating to ₹3.50 crore were sanctioned to the corporate debtor under a loan agreement dated 24.01.2014. The loan was secured by a mortgage over the corporate debtor’s immovable property and was guaranteed by the respondent and another guarantor through a Deed of Guarantee dated 24.01.2014. The corporate debtor defaulted in repayment, the account was classified as a Non-Performing Asset (NPA) on 01.11.2017, and a demand notice under Section 13(2) of the SARFAESI Act was issued. The petition under Section 95 of the IBC was thereafter filed against the respondent as personal guarantor.
The respondent opposed the petition, contending that it was barred by limitation. It was argued that the default occurred on 01.11.2017 while the petition was filed only on 09.06.2023. The respondent submitted that a time-barred debt could not form the basis of insolvency proceedings and relied upon the Supreme Court’s decision in Syndicate Bank vs. Channaveerappa Beleri & Ors. It was also contended that the respondent had resigned from the corporate debtor in October 2016, that notices invoking the guarantee were issued only in 2022, and that a compromise and withdrawal in liquidation proceedings, under which the creditor accepted a sum of ₹1,03,66,200, discharged the guarantor’s liability.
