In a ruling reported on 10 September 2026, the National Company Law Appellate Tribunal (NCLAT) at New Delhi, comprising Justice Sharad Kumar Sharma and Technical Members Arun Baroka and Indevar Pandey, quashed insolvency proceedings against a personal guarantor because they had been filed before a different NCLT bench from the one handling the company’s insolvency. The case is Kamlesh Rani Singla v. Praveen Kumar Garg (Company Appeal (AT) (Insolvency) 275 of 2026).
What was decided
The appellant was a suspended director and personal guarantor of Laxmi Pipes Ltd., whose corporate insolvency resolution process (CIRP) was pending before NCLT Chandigarh. An operational creditor filed an application under Section 95 of the Insolvency and Bankruptcy Code, 2016 against her before NCLT New Delhi, which was admitted on 28 May 2024. Her request for transfer to Chandigarh was refused by an order of the NCLT Principal Bench dated 5 December 2025.
The NCLAT held that Section 60(2) is “an overriding statutory mandate”: where a CIRP is pending before one NCLT bench, proceedings against the personal guarantor must be filed before that same bench. The New Delhi bench therefore lacked territorial and inherent jurisdiction, and continuing the proceedings would be void. The Tribunal set aside the Principal Bench order, quashed the Section 95 proceedings, and allowed the creditor to refile before the correct bench.
Why it matters
Promoters routinely give personal guarantees for company loans, and lenders increasingly pursue guarantors alongside, or soon after, the company’s CIRP. Jurisdiction is a threshold point: proceedings before the wrong bench can be set aside entirely, regardless of the merits.
Keeping guarantor and company proceedings together also avoids conflicting decisions about the same debt and the same security. For guarantors in Delhi NCR, where companies may be registered in one state and promoters live in another, the bench seized of the company’s CIRP is the starting point.
Practical points
- Confirm which NCLT bench is hearing the company’s CIRP or liquidation before responding to a Section 95 application.
- Raise any jurisdiction objection at the earliest stage and on the record.
- Note that the interim moratorium under Section 96 has its own consequences for other proceedings.
- Keep copies of the guarantee deeds, invocation notices and any DRT orders on liability.
- Coordinate the guarantor’s position with the company’s resolution strategy.
Sources: LiveLaw Biz, 10 Sep 2026.
For a confidential discussion on personal guarantor insolvency, see IBC and NCLT Matters.
General legal information only; not legal advice or solicitation.
