NCLT Admits Personal Insolvency Proceedings Against Promoter-Guarantor in ₹3,740 Crore IDBI Trusteeship Case

Background

The National Company Law Tribunal, Principal Bench, New Delhi, has admitted a petition under Section 100 of the Insolvency and Bankruptcy Code, 2016, initiating the Personal Insolvency Resolution Process (PIRP) against Mr. Gautam Choudhary, promoter and personal guarantor of Shree Vardhman Infraheights Private Limited (SVIPL). The application was filed by IDBI Trusteeship Services Ltd., acting as Debenture Trustee for Kautilya Finance B.V., seeking initiation of insolvency proceedings against the personal guarantor for an outstanding debt of approximately ₹3,740 crore. The Tribunal also considered IA 5095/2025, containing the report of the Resolution Professional under Section 99 of the Code.

The underlying transaction involved the issuance of non-convertible debentures (NCDs) by SVIPL between 2016 and 2018, aggregating to ₹125 crore, for the development of a real estate project. Mr. Gautam Choudhary executed multiple personal guarantee agreements securing repayment obligations under these NCDs. Following repeated defaults, restructuring attempts, and failure to comply with revised repayment schedules, CIRP was initiated against SVIPL on 8 January 2025, which was upheld up to the Supreme Court. Upon invocation of the personal guarantees and issuance of demand notices under Section 95, the Resolution Professional recommended admission of the petition, noting that the debt was due, payable, and unpaid, and that the application was complete and within limitation. The personal guarantor objected on grounds of limitation and pendency of CIRP against the corporate debtor.

Findings and Order

Rejecting these objections, the NCLT held that (i) acknowledgement of debt and admission of CIRP against the corporate debtor extended limitation against the guarantor, and (ii) liability of a personal guarantor is independent and co-extensive, unaffected by proceedings against the corporate debtor or corporate guarantor. Accordingly, the Tribunal admitted the petition, declared a moratorium under Section 101, directed the Resolution Professional to invite claims and proceed with preparation of a repayment plan, and ordered initiation of PIRP against the personal guarantor.