Case No. CP(IB)/51(CHE)/2025
Order date: 19/03/2025
Brief Facts of the Case
Mr. Keerthan Kumar Upadhya (the Applicant) applied Section 94 of the Insolvency and Bankruptcy Code, 2016 (IBC) before the National Company Law Tribunal (NCLT), Chennai Bench. He sought the initiation of the Insolvency Resolution Process (IRP) against himself as a Personal Guarantor for SKV United Hospitals Limited (the Corporate Debtor).
The application was represented by Advocate Sahaya Sukuna for the petitioner. The case revolved around the liability of personal guarantors under the IBC and whether a personal guarantor can voluntarily initiate insolvency proceedings against themselves.
Key Legal Issues
- Whether a personal guarantor can file for their insolvency under Section 94 of the IBC.
- The extent of liability of a personal guarantor under the insolvency framework.
- Applicability of moratorium and resolution process for personal guarantors.
Final Judgment (Order Date: 19/03/2025)
- The NCLT, Chennai Bench, admitted the application under Section 94 of the IBC, recognizing the personal guarantor’s right to initiate insolvency proceedings.
- The tribunal appointed a Resolution Professional (RP) to assess the financial position of the personal guarantor.
- A moratorium under Section 101 of the IBC was imposed on the assets of Keerthan Kumar Upadhya, restricting legal actions by creditors during the insolvency resolution process.
- The liability of the personal guarantor was deemed independent of the corporate debtor’s insolvency, reaffirming the applicability of IBC provisions to personal guarantors.
Conclusion:
This judgment reinforces the legal standing of personal guarantors under the IBC and provides clarity on their insolvency resolution process. The ruling is expected to set a precedent for similar cases involving personal guarantor liabilities in corporate debt defaults.