Case Note & Summary
The appeal arose from an order dated 05.12.2025 passed by the National Company Law Tribunal (NCLT), New Delhi, dismissing a transfer application filed by the Appellant, a Suspended Director and Personal Guarantor of a Corporate Debtor, seeking to transfer insolvency proceedings to the Chandigarh Bench. The Appellant contended that the NCLT, New Delhi, lacked jurisdiction to hear the case as the Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor was already pending before the NCLT, Chandigarh. The Appellant argued that the proceedings initiated under Section 95 of the Insolvency and Bankruptcy Code, 2016, against her were void ab initio due to the jurisdictional error. The NCLT had dismissed the transfer application, relying on a Gujarat High Court judgment that was deemed inapplicable to the case at hand. The Appellate Tribunal analyzed the statutory provisions of Section 60(2) of the Code, which mandates that applications related to the insolvency of a Personal Guarantor must be filed before the same NCLT where the CIRP of the Corporate Debtor is pending. The Tribunal found that the NCLT, New Delhi, had no jurisdiction to proceed with the application against the Appellant, as the CIRP was pending in Chandigarh. The Tribunal set aside the NCLT's order and quashed the proceedings, directing that they be transferred to the appropriate Bench in Chandigarh. The decision emphasized the need for consolidation of proceedings to avoid conflicting decisions and ensure judicial consistency.
Headnote
A) Insolvency Law - Jurisdiction of NCLT - Exercise of Jurisdiction - Section 60(2) Insolvency and Bankruptcy Code, 2016 - The NCLT, New Delhi, lacked jurisdiction to entertain proceedings against a Personal Guarantor when the CIRP of the Corporate Debtor was pending before another Bench. The court held that all insolvency proceedings related to a Corporate Debtor and its guarantor must be heard by the same Bench to ensure judicial consistency (Paras 8-10).
Issue of Consideration
Whether the Hon'ble National Company Law Tribunal, New Delhi, Bench - II, could exercise jurisdiction over proceedings initiated under Section 95 of the Insolvency and Bankruptcy Code, 2016 against a Personal Guarantor, when the Corporate Insolvency Resolution Process of the Corporate Debtor is admittedly pending prior in time before the Hon'ble NCLT, Chandigarh Bench - II?
Final Decision
The Appellate Tribunal set aside the order of the NCLT, New Delhi, quashed the proceedings in CP(IB) No. 419/ND/2023, and directed that the proceedings be transferred to the NCLT, Chandigarh Bench, being the competent authority under Section 60(2) of the Insolvency and Bankruptcy Code, 2016.
Law Points
- jurisdiction
- transfer application
- insolvency resolution
- personal guarantor
- corporate debtor
