Dentons Link Legal represented Mr. Vijay Biyani, the Respondent Personal Guarantor in a Company Petition under Section 95 of the IBC, 2016 filed by Central Bank of India before the Hon'ble NCLT, Mumbai for seeking initiation of Personal Insolvency Resolution Process ("PIRP").
The Hon'ble NCLT vide its order dated 16th January, 2024, had appointed the Resolution Professional who had thereafter filed his report under section 99 of the IBC recommending for the admission of the Company Petition.
The matter was argued finally on 29th April, 2024 when the Hon'ble NCLT was pleased to dismiss the Company Petition interalia on the grounds that the deeds of personal guarantee were never invoked prior to issuance of Form-B demand notice as the Financial Creditor has not called upon the Personal Guarantor to pay the debt in default under the guarantee and therefore, the Form-B Demand Notice was itself irregular. Reliance was placed on the judgement of the Hon'ble NCLAT in the case of State Bank of India Vs. Dipak Kumar Singhania [Company Appeal (AT) (Insolvency) No.191 of 2025].
Vide the judgement, the Hon'ble NCLT has affirmed the position that default shall arise on the part of guarantor only when demand notice is issued as contemplated in the deed of guarantee and that the absence of existence of default a Company Petition u/s 95 of IBC, 2016 is not maintainable.
The team comprised of Ms. Petrushka Dasgupta (Partner), Ms. Krishna Baruah (Principal Associate) and Mr. Kewal Buddhdev (Associate).