Unchallenged order under Section 114(1) IBC rejecting repayment plan due to non-submission triggers bankruptcy under Section 121 without fresh notice to personal guarantors; natural justice satisfied by prior proceedings; waiver bars later challenge. (38 words)

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 95, 99, 100, 105, 112, 113, 114(1), 115(2), 121, 123 - Personal guarantors to corporate debtor - Initiation of bankruptcy proceedings - Where repayment plan not submitted by personal guarantors under Chapter III and order under Section 114(1) rejecting plan attained finality without challenge, creditor entitled to apply for bankruptcy under Section 121(1)(b) read with Section 115(2) - No mandatory requirement for fresh notice or hearing under Rule 37 NCLT Rules, 2016 or Section 420 Companies Act to personal guarantors at bankruptcy stage as prior proceedings exhausted and unchallenged - Principles of natural justice deemed satisfied; waiver by conduct in not challenging earlier order. (Paras 23-50)

(B) Insolvency and Bankruptcy Code, 2016 - Section 114(1) - Unchallenged order rejecting repayment plan - Attains finality, triggers consequences under Section 115(2) for bankruptcy application - Subsequent bankruptcy order is logical corollary, not vitiated by absence of fresh notice. (Paras 27-30, 35-36)

(C) NCLT Rules, 2016 - Rule 37; Companies Act, 2013 - Section 420 - Applicability to bankruptcy proceedings under IBC post-rejection of repayment plan - Not attracted where proceedings consequential to unchallenged prior adjudication; no re-agitation of settled issues. (Paras 33-40, 42-46)

Facts of the case:
Personal guarantors to corporate debtor defaulted on financial facilities aggregating substantial amount; loan recalled; Section 95 proceedings admitted; no viable repayment plan submitted; Section 114(1) order rejecting plan passed and unchallenged; creditor applied under Section 121 for bankruptcy; NCLT allowed without fresh notice to guarantors; appeals challenging lack of hearing dismissed by Appellate Tribunal.

Findings of Court:
Order under Section 114(1) final and unchallenged; opened gateway for bankruptcy under Section 115(2); no violation of natural justice in Section 121 proceedings; appellants bound by waiver and prior acquiescence.

Issues: Whether personal guarantors entitled to fresh notice/hearing before bankruptcy order under Section 121 post-unchallenged Section 114(1) rejection; applicability of Rule 37 NCLT Rules and Section 420 Companies Act at that stage.

Ratio Decidendi: Bankruptcy proceedings under Section 121 are consequential to final Section 114(1) order rejecting repayment plan due to non-submission; no separate notice required as pre-conditions satisfied earlier; challenge impermissible on grounds of audi alteram partem where prior stages unchallenged.

Result: Appeals dismissed.

Table of Content
1. identical appeals challenge personal guarantor bankruptcy orders. (Para 1 , 2 , 3)
2. corporate debtor default led to guarantor insolvency proceedings. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12)
3. unchallenged section 114 order finalizes repayment plan rejection. (Para 13 , 14 , 15 , 30)
4. sequential ibc chapter iii/iv compliance mandates bankruptcy post-rejection. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29)
5. no notice required for section 121 after unchallenged section 114. (Para 33 , 34 , 35 , 36)
6. section 123 application exempts natural justice principles. (Para 37 , 38 , 39 , 40 , 41 , 42)
7. waiver binds appellants to bankruptcy consequences. (Para 43 , 44 , 45 , 46 , 47 , 48)
8. appeals dismissed for lack of merit. (Para 49 , 50)

O R D E R

(Hybrid Mode)

10.03.2026:

Oral Judgment : Justice Sharad Kumar Sharma, Member (Judicial):

The subject proceedings in all these Company Appeals are identical on facts and law as they are emanating from the orders that were passed on an application preferred under Section 121(B) of the I & B Code, 2016, to be read with Section 123(1) of the Code.

2. The consequential effect of the same had been that, all four Interlocutory Applications had been allowed by an order passed on a common date i.e. 14.01.2026, consequentially resulting into directing the initiation of the Bankruptcy proceedings as against the Appellants, who happened to be the Personal Guarantors.

3. The grievance of the Appellant, who admit their status as to be that of the Personal Guarantor, is as against this impugned order of 14.01.2026, that has been respectively rendered in the following proceedings:

A) Company Appeal (AT) (CH) (INS) No. 116 / 2026, under challenge is an order passed on IA (IBC) / 488 / 2025 in CP (IBC) / 42 / 2024;

B) In Company Appeal (AT) (CH) (INS) No. 117 / 2026, the challenge is to IA (IBC) / 492 / 2025 as preferred in CP(IBC) / 53 / 2024;

C) In Company Appeal (AT) (CH) (INS) No. 118 / 2026, the challenge is to the impugned order passed on IA (IBC) / 489 / 2025 as preferred in CP(IBC) / 52 / 2024, and

D) In Company Appeal (AT) (CH) (INS) No. 119 / 2026, the challenge is to the IA (IBC) / 490 / 2025 as preferred in CP (IBC) / 44 / 2024.

4. The facts, which could be derived on the basis of the pleadings which has been brought on record by the Appellant are that:-

The Corporate Debtor had entered into an apparent established default in repayment of its financial obligations flowing from a channel of Finance Agreement and were determined to have been a defaulter as on 21.11.2018.

Consequent to which, the Respondent No. 1 i.e. M/s. Tata Capital Limited, the Financial Creditor is said to have recalled the loan, demanding the entire outstanding amount due to the tune of Rs.35,59,75,936/- by issuing a Loan Recall Notice in that regard on 13.02.2019.

5. Consequence to the aforesaid Recall Notice, the proceedings was drawn under Section 95 of the Code, as against the respective Personal Guarantors, the Appellants herein, which was instituted before the Ld. NCLT, Kochi Bench, which had passed an order on 06.05.2025, admitting the proceedings under Section 95 of I & B Code, 2016, as against the Personal Guarantors, the Appellants herein above.

6. The Ld. NCLT on an application, which was thus preferred under Section 121(B) to be read with Section 123(1) of the I & B Code, 2016, to be read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process of Personal Guarantors to Corporate Debtors) Rules, 2019, the Ld. NCLT has directed the Bankruptcy Order against the Appellants, which is under challenge.

7. The Financial Creditor invoked the proceedings under Section 121 (B) to be read with Section 123 (1) of the Code. Consequent to which, the Ld. Adjudicating Authority, while dealing with the factual back drop, had observed that, the Corporate Debtor, M/s. Simtel Trading Corporation Private Limited, who is said to have availed a Term

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