Subsequent Application U/S 95 IBC Is Barred Where Proceedings Against Same Personal Guarantor Are Already Pending: NCLAT, Chennai

The National Company Law Appellate Tribunal (NCLAT), Chennai bench comprising Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) have held that where proceedings under Section 95 of the Insolvency and Bankruptcy Code (IBC) have already been initiated by one Financial Creditor, a subsequent application under the same provision by another creditor against the same Personal Guarantor is barred by Section 96 of the Code.Brief Facts The Appellant, Indian Bank, had filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016, before the NCLT, Chennai Bench, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the Respondent, the Personal Guarantor. The NCLT dismissed the application on 06.01.2025 as infructuous with liberty to file afresh at a later date. The Appellant approached the NCLAT to challenge the said order. Observations The Tribunal noted that an identical issue had already been adjudicated in Comp App (AT) (CH) (Ins) No.121/2025 titled Indian Bank, SAMB, Chennai Vs T. Prabakar, by which the application filed by the Appellant under Section 95(1) of IBC against another personal guarantor was dismissed on the ground that IDBI Trusteeship Services Limited, another Financial Creditor had already initiated proceedings under Section 95 against the same personal guarantor. Hence, no subsequent application under Section 95 could be entertained against the Personal Guarantor owing to the bar under Section 96. The NCLAT thus dismissed the appeal, holding that the appropriate course is for the NCLT to expedite the existing proceedings rather than to entertain multiple petitions under Section 95. Case Title: Indian Bank v. K R Tirumuruhan Case No.: Company Appeal (AT) (CH) (Ins) No.150/2025 For Appellant : Mr. Pranava Charan, Advocate For Respondent : Mr. Sathish Kumar A S, Advocate Date of Judgment: 04.06.2025 Click Here To Read/Download The Order

Subsequent Application U/S 95 IBC Is Barred Where Proceedings Against Same Personal Guarantor Are Already Pending: NCLAT, Chennai

Tazeen Ahmed

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