IBC Doesn't Allow Extension of Personal Insolvency Process For Revisions Of Repayment Plan: NCLT Delhi

The National Company Law Tribunal (NCLT) at New Delhi has recently held that a personal guarantor cannot be granted repeated opportunities to revise a repayment plan once the statutory process under the Insolvency and Bankruptcy Code has run its course, and refused to allow any further extension of the personal insolvency resolution process.

A coram comprising President Ramalingam Sudhakar and Technical Member Ravindra Chaturvedi approved the rejection of the repayment plan submitted by the personal guarantor of a Delhi based company after it failed to secure the mandatory creditor approval.

The tribunal said “The Code does not provide for extension of the PIRP for permitting repeated revisions by the PG when no acceptable plan has emerged despite multiple opportunities,”

The case arose from loans of Rs 45 crore availed by Shree Raj Mahal Jewellers Private Limited from a consortium of banks, including Bank of India, between 2010 and 2014, for which Pradeep Goel stood as personal guarantor. After the company's account was classified as a non-performing asset on June 30, 2015, liquidation proceedings commenced on September 8, 2020.

Bank of India thereafter initiated the Personal Insolvency Resolution Process against Goel, which was admitted by the tribunal on December 17, 2024.

During the process, Resolution Professional Anil Kohli convened four meetings of creditors between February and June 2025. The initial plan proposed Rs 24.46 crore against admitted claims of Rs 1,267 crore. This was later revised to Rs 28.60 crore and finally to Rs 29.50 crore. Goel sought another opportunity to revise the plan, arguing that bankruptcy would diminish value and defeat the objective of value maximisation.

He also claimed that most consortium banks had initially agreed to the enhanced proposal and alleged that Bank of India's opposition influenced other lenders. He further relied on amounts already realised by Bank of India through an e-auction and sums lying in a no-lien account.

The tribunal rejected these contentions after examining the minutes of the creditors' meetings. It found that creditors were dissatisfied with the proposal from the outset and that the allegation of any initial agreement among lenders was not borne out by the record. The tribunal also held that recoveries made by Bank of India were irrelevant, as the moratorium had ended and creditors were entitled to enforce their rights.

It dismissed allegations of bias against the Resolution Professional, approved the report under Section 112 of the Code, lifted the moratorium, discharged the Resolution Professional with liberty to claim costs, and granted liberty to the creditors and the debtor to initiate bankruptcy proceedings as permitted under the Code.

Click Here To Read/Download Order