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2025 Supreme(Online)(NCLT) 163
NATIONAL COMPANY LAW TRIBUNAL
SHRI PRAVEEN GUPTA, SHRI ASHISH VERMA, JJ
MANISH AGARWAL RESOLUTION PROFESSIONAL FOR MR. S. VISVANATHAN – Appellant
Versus
SH. S.VISVANATHAN – Respondent
IA(I.B.C) - 76/2025
For the Petitioner:ABHISHEK Anand
The death of a Personal Guarantor prior to the submission of a repayment plan necessitates the abatement of Personal Insolvency Resolution Process proceedings.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 112, 114, 115, 105, 106, 121 - Personal Insolvency Resolution Process (PIRP) - Application filed seeking orders due to non-submission of repayment plan by the Personal Guarantor, who reportedly passed away - The creditors opined that PIRP proceedings shall abate due to the death of the Personal Guarantor before reaching the required stage. (Paras 1, 11, 12)
(B) Personal Guarantor's Death - The creditors noted that the PIRP proceedings cannot continue without the Personal Guarantor, as the stage for submission of the repayment plan had not been reached. (Paras 11, 12)
(C) Compliance with Code - The Resolution Professional reported non-receipt of repayment plan and sought directions from the Adjudicating Authority. (Paras 10, 12)
Facts of the case:
The application was filed under Section 112 of the Code due to the Personal Guarantor's failure to submit a repayment plan, compounded by the reported death of the Personal Guarantor, Mr. S. Visvanathan.
Findings of Court:
The court noted the necessity to ascertain the death of the Personal Guarantor and allowed the Financial Creditor to take appropriate action under the Code.
Issues: The main issue was whether the PIRP proceedings should continue in light of the Personal Guarantor's reported death.
Ratio Decidendi: The court held that the PIRP proceedings must abate due to the Personal Guarantor's death prior to the required stage of the process.
Result: Application disposed of with liberty to take appropriate action.
ORDER
IA NO.76/2025
1. This application has been filed U/s 112 of the Insolvency and Bankruptcy Code, 2016 interalia seeking the following prayer :-
a. Allow the present application;
b. Pass appropriate orders under Section 114 read with Section 115 of the Code in view of non-submissions/ non-approval of repayment plan by the Creditors of Mr. S. Visvanathan; and c. Pass such other further order / order(s) as may be deemed fit and proper in the facts and circumstances of the case.
2. Briefly stated facts of the matter are that in terms of an order dated 25.04.2024 passed in CP (IB) No.51/ALD/2022, the Resolution Professional (RP) was appointed for initiating Personal Insolvency Resolution Process (PIRP) against Mr. S Vishvanathan being a Personal Guarantor of M/s K K Milk Fresh India Limited, which was the Corporate Debtor/ Principal Borrower, and in terms of an order dated 07.09.2022, the RP was directed to prepare a report in terms of Section 99 of the Code, which was filed by the RP, and in terms of an order dated 25.04.2024 this Adjudicating Authority has accepted the report of the RP filed U/s 99 of the Code and admitted the application for initiating the PIRP against the Personal Guarantor.
3. The RP has also issued public announcement inviting claims from all the creditors. He further submits in the application that the newspaper publication were made in two newspapers namely the ‘Financial Express’ and ‘Jansatta’ on 18.05.2024. Upon the receipt of the claims from the creditors, the list of the creditors was prepared by RP and has been given at page no.5 of the present application, which reads as under :-
| Sr. No. | Name of Creditor | Nature of Claim | % of Claims Admitted |
| 1. | Bank of Baroda | Secured Creditor | 100% |
| 2. | IDBI Bank Limited | Secured Creditor | 100 |
| 3. | Central Bank of India | Secured Creditor | 100 |
| 4. | State Bank of India | Secured Creditor | 100 |
| 5. | Union Bank of India | Secured Creditor | 100 |
| 6. | Punjab National Bank | Secured Creditor | 100 |
| Total | 100% |
4. It has further been averred in the application that the RP accordingly made several repeated communications with the Personal Guarantor to submit the relevant information, so that the Statement of Affairs could be prepared in terms of Regulation 10 of the IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019. However, the RP was not in a position to receive any reply thereof.
5. The first meeting of the CoC was convened on 08.08.2024. Since there was no communication received from the Personal Guarantor despite sending emails, the RP also sent a speed post at the address of the Personal Guarantor on 25.05.2024 about the initiation of the PIRP against him, which was returned back with the remarks that due to unavailability of any person at that address, the speed post could not be delivered. Even the representative of the RP visited the address of the Personal Guarantor, but there was no person residing at the address. The RP also while searching the contact details of the Personal Guarantor came to know from fellow directors of the company Mr. Chand Narain Kuchroo that the Personal Guarantor had passed away, however there is no documentary evidence to substantiate the same.
6. Another meeting of the CoC was held on 28.11.2024, wherein interalia the issue regarding filing of an application with the Municipal Corporation Department to obtain the death certificate of the Personal Guarantor, Mr. S. Visvanathan, was also discussed and the RP was accordingly authorized to file the appropriate application before the concerned Municipal Corporation Department.
7. It was also further discussed in the meeting that as informed to the creditors that the Personal Guarantor, Mr. S. Visvanathan has reportedly expired and as the stage of PIRP as laid down U/s 121 of the Code has not yet reached, henceforth, it is observed by the creditors that the PRIP proceedings on the death of the personal guarantor prior to reaching the aforementioned staged including submission of Repayment plan, the proceeding
