Personal Guarantor's Failure To Submit Repayment Plan Leads To Bankruptcy: NCLT Hyderabad

The National Company Law Tribunal (NCLT) at Hyderabad has ordered bankruptcy proceedings against P Kameswari, the personal guarantor of Viceroy Hotels Limited. The tribunal said that when a repayment plan is not filed or does not receive creditor approval, the law treats it as a rejection of the repayment plan under the Insolvency and Bankruptcy Code. Viceroy Hotels is a Hyderabad-based company that owns and runs Marriott-branded hotels in the city through licensing arrangements with Marriott International. A coram of Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri allowed the plea filed by State Bank of India. Allowing the bankruptcy plea, the tribunal said, “In view of the above provision, it is observed that in the absence of a repayment plan filed by the Personal Guarantor, the Resolution Professional could not proceed with preparing or submitting the report as required under Section 105 and 114 of the Code. This failure is treated as equivalent to the rejection of the repayment plan, as contemplated under Section 115(2) of the IBC.”The matter goes back to loans taken by Viceroy Hotels in January 2008 for hotel projects in Hyderabad, Bengaluru and Chennai. The company availed credit facilities, including Rs 64 crore for the Hyderabad project, from SBI. P. Kameswari stood guarantee for the loans. The account slipped into default and was classified as a non-performing asset on August 1, 2011. SBI then initiated recovery proceedings under the SARFAESI Act and before the Debt Recovery Tribunal. The company was later admitted into insolvency in 2018, resulting in a moratorium. Insolvency resolution proceedings against Kameswari were admitted in February 2024. An interim moratorium followed and a resolution professional was appointed. SBI said the personal guarantor failed to secure approval of a workable repayment plan despite several chances. A revised plan was later placed before creditors. It did not get the required support. The tribunal said nothing on record showed that an approved repayment plan was likely. It clarified that without an approved plan, the resolution professional cannot take the process forward, and the law treats this as a rejection of the plan. The tribunal declared P Kameswari bankrupt and appointed Atkuru Sai Prasad as the bankruptcy trustee. He has been asked to protect the assets and file a preliminary report within ninety days. Case Title: State Bank of India vs P. Kameswari, Viceroy Hotels LtdCase Citation: 2026 LLBiz NCLT (HYD) 15Case Number: IA No. 262 of 2025 in CP (IB) No. 213/95/HDB/2021For Applicant: Advocate G.P. Yash VardhanFor Personal Guarantor: Advocate Siva PraneetaClick Here To Read/Download Order

Personal Guarantor's Failure To Submit Repayment Plan Leads To Bankruptcy: NCLT Hyderabad

Kirit Singhania

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