Financial Creditor Can File Plea U/S 7 Of IBC If Actionable Rights Under Guarantee Are Preserved In Approved Resolution Plan: NCLT New Delhi

The National Company Law Tribunal (NCLT), New Delhi Bench of Shri Manni Sankariah Shanmuga Sundaram (Hon'ble Member Judicial) and Shri Atul Chaturvedi (Hon'ble Member Technical) has held that Financial Creditors can proceed against Personal Guarantors even after the approval of the Resolution Plan, if actionable rights under the guarantee are preserved. The present petition has been filed under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Petitioner submitted that a fresh cause of action accrued in favour of the Financial Creditor on 24.11.2020, being the date when the legal bar, if any, against initiation of CIRP against a corporate guarantor stood removed. The present petition was filed on 09.09.2021, i.e., within three years from the date of the change in law and is therefore within limitation. It was further submitted that the Resolution Plan clearly provides that the mortgage, hypothecation, and corporate guarantees extended by ACCIL Hospitality Pvt. Ltd. shall fall within the ambit of “Excluded Rights,” thereby preserving the right of the Financial Creditor to proceed independently against the Corporate Guarantor for recovery of the balance dues. Per contra, the Respondent submitted that in the absence of any document evidencing acknowledgment or revival of liability, the claim is clearly barred by the limitation period under Article 137 of the Limitation Act. Once the debt has been assigned, the Financial Creditor cannot initiate fresh or parallel proceedings against the Corporate Guarantor based on the same underlying obligation. It was further submitted that the earlier petition filed in 2019 was dismissed on 21.10.2019 and upheld by NCLAT on 17.02.2020. No fresh demand notice or acknowledgment was made prior to initiation of the present proceedings. It is submitted that the date of NPA, not the date of law change or assignment, triggers limitation. The Tribunal noted that in Mr. Vikas Aggarwal v/s Asian Colour Coated Ispat Limited & others the NCLAT held that under an approved Resolution Plan, Financial Creditors may retain excluded rights which are not transferred to the Resolution Applicant or its Special Purpose Vehicle (SPV). Applying the above ratio to the facts of the present case, the Tribunal held that even if the debt of the principal borrower is transferred to the SPV, the financial creditor can still initiate insolvency proceedings against the personal guarantors unless such rights were expressly assigned or extinguished. Therefore, the financial creditor can proceed against the guarantor due to retention of excluded rights under the Resolution Plan. It held that retention of actionable rights by the Financial Creditor under the Guarantee executed by the Corporate Debtor entitles it to proceed against the Guarantor under section 7 of the IBC. These enforceable rights preserved under the Resolution Plan as Excluded Rights are not nullified even if the Remaining Debt is assigned. The Tribunal further observed that mere pendency of writ petitions does not halt statutory adjudication. The jurisdiction of the NCLT under the IBC can be barred only when a specific order of stay or injunction is passed by the High Court otherwise there is no bar on the power of the Adjudicating Authority to decide the petition under section 7 of the IBC. It concluded that the present petition was filed three years after the date of invocation of guarantee therefore it is clearly time barred. Accordingly, the present petition was non-maintainable on grounds of being barred by limitation. Case Title:M/s IFCI Limited VERSUS M/s ACCIL Hospitality Private Limited Case Number:CP No.: IB 492(PB)/2021 Order Date: 15/07/2025 Click Here To Download Order/Judgement

Financial Creditor Can File Plea U/S 7 Of IBC If Actionable Rights Under Guarantee Are Preserved In Approved Resolution Plan: NCLT New Delhi

Mohd Malik Chauhan

Tags