Threshold Limit For Initiating Insolvency Process Against Personal Guarantors Is Also ₹1 Crore: NCLT New Delhi

The National Company Law Tribunal (NCLT), New Delhi, ruled that the threshold limit for initiating insolvency proceedings against personal guarantors is ₹1 crore, in line with Section 60 of the Insolvency and Bankruptcy Code (IBC). The tribunal clarified that this monetary limit aims to discourage frivolous insolvency petitions and ensure efficient resolution of genuine financial distress cases. In this case, the petitioner failed to meet the threshold requirement, leading to the dismissal of the application. The decision underscores the importance of statutory thresholds in regulating insolvency proceedings and maintaining judicial efficiency. It also highlights the role of the IBC in balancing creditors' rights with safeguards against abuse of legal processes.