Case Note & Summary
The case involves an appeal by Indian Bank (Financial Creditor) against an order of the National Company Law Tribunal (NCLT), Chennai Bench, dated 06.01.2025 in CP(IB)80/2024. The NCLT had dismissed the bank's application under Section 95 of the Insolvency and Bankruptcy Code (IBC) against the respondent, a personal guarantor, as infructuous, with liberty to file afresh later. The bank challenged this order before the National Company Law Appellate Tribunal (NCLAT), Chennai. The NCLAT observed that an identical issue had been decided in a previous appeal, Comp App (AT) (CH) (Ins) No.121/2025, Indian Bank vs. T. Prabakar, where the NCLAT had dismissed a similar challenge. In that case, the NCLT had dismissed the bank's Section 95 application because IDBI Trusteeship Services Limited had already initiated proceedings under Section 95 against the same personal guarantor in CP(IB) No.785/2020, and the moratorium under Section 96 of IBC barred any subsequent application. The NCLAT upheld that decision by judgment dated 30.04.2025, directing the NCLT to expedite the pending Section 95 proceedings. Applying the same reasoning, the NCLAT dismissed the present appeal, holding that the impugned order was correct and that the bank's remedy was to pursue its claim in the already pending proceedings.
Headnote
A) Insolvency and Bankruptcy Code - Personal Guarantor - Section 95 and Section 96 - Bar on Subsequent Application - The issue was whether a second application under Section 95 of IBC against a personal guarantor is maintainable when a prior application under Section 95 by another financial creditor is already pending. The NCLAT held that once an application under Section 95 is admitted, the moratorium under Section 96 bars any subsequent application against the same personal guarantor. The appeal was dismissed with a direction to expedite the pending proceedings. (Paras 1-2)
Issue of Consideration
Whether a subsequent application under Section 95 of IBC against a personal guarantor is maintainable when another financial creditor has already initiated proceedings under Section 95 against the same personal guarantor.
Final Decision
The appeal is dismissed. The impugned order of NCLT is upheld. The NCLT is requested to expedite the pending Section 95 proceedings in CP(IB) No.785/2020.
Law Points
- Section 95 IBC
- Section 96 IBC
- Personal Guarantor
- Insolvency Resolution Process
- Bar on subsequent application
