NCLT Delhi Declares Personal Guarantor Bankrupt in IDBI Bank Case

Background

The National Company Law Tribunal, Principal Bench, New Delhi, has declared Mr. Anumod Sharma bankrupt under Section 126 of the Insolvency and Bankruptcy Code, 2016 in IA-4344/2025 in CP (IB)-765(PB)/2023. This follows an application by IDBI Bank under Section 123 read with Rule 7 of the Insolvency and Bankruptcy (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019, seeking initiation of bankruptcy proceedings against Mr. Sharma, who stood as a personal guarantor to Great Indian Nautanki Company Private Limited.

The corporate debtor had defaulted on substantial banking facilities guaranteed by Mr. Sharma, with the account declared a non-performing asset (NPA in September 2014) and multiple recovery actions initiated, including proceedings under the SARFAESI Act and a debt recovery application (O.A. No. 848/2017) before DRT-II, New Delhi. CIRP under Section 7 was admitted against the corporate debtor by order dated 21 October 2022. Subsequently, Mr. Sharma himself had initiated personal insolvency proceedings in 2023. After several creditors’ meetings, the Resolution Professional reported that the personal guarantor failed to produce a viable repayment or resolution plan. On the RP’s recommendation under Section 112 and after creditor deliberations, the Tribunal approved rejection of the repayment plan and permitted alternative legal recourse in March 2025. Upon continued non-compliance by the guarantor, IDBI Bank filed the present bankruptcy application.

The personal guarantor was given advance notice and opportunities to file a response but did not file any substantive reply by the deadline. The Tribunal observed that the matter merited final resolution without further delay.

Upon admission of the application, the Tribunal:

1. Declared Mr. Anumod Sharma as bankrupt under Section 126 of the Code, concluding that the personal guarantor had defaulted on debts secured in his capacity as guarantor.
2. Appointed Mr. Rahul Jindal as the Bankruptcy Trustee under Section 125 of the Code.
3. Directed the bankrupt to submit his financial position to the Trustee within seven days.
4. Ordered that the bankrupt’s estate, excluding exempt assets, vests with the Trustee and that the Trustee shall administer the estate, publish a public notice inviting creditor claims, and manage the process in accordance with Sections 128–137 of the Code and corresponding regulations.
5. Stated that the interim moratorium under Section 124 ceases and a fresh moratorium under Section 128(1)(c) begins in relation to the bankrupt’s debts.

The order directs the Registry to circulate certified copies to the bankrupt, the creditors, and the bankruptcy trustee, and confirms that the bankruptcy process shall continue until discharge under Section 138 of the Code.