Mumbai: The National Company Law Tribunal (NCLT), on June 10, admitted an insolvency resolution application against Manohar Lal Gupta, the personal guarantor of Parenteral Drugs (India) Limited (PDIL), for a default of Rs 317.83 crore. The application was filed by National Asset Reconstruction Company Limited (NARCL) under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016.
As per the case details, the matter pertains to guarantees extended by M. L. Gupta for loans taken by PDIL from State Bank of India (SBI) and Punjab National Bank (PNB). The complaint states that despite multiple restructuring efforts, including a One-Time Settlement (OTS) agreement in 2021, PDIL failed to repay the full agreed amount of Rs 154 crore, which it was liable to pay to the banks, leading to the cancellation of the OTS.
“As per the terms of the OTS, the Corporate Debtor was expected to make repayments according to a pre-agreed schedule, pursuant to which certain charged assets were to be released by SBI and PNB in a phased manner. Subsequently, the Corporate Debtor deposited various amounts totaling Rs 65 crore, following which certain charges were released. However, the entire amount of Rs 154 crore was to be paid by the Corporate Debtor within six months from the date of acceptance of the OTS, i.e., from December 31, 2021. The Corporate Debtor defaulted on this, due to which SBI, on July 13, 2022, informed the Corporate Debtor of the cancellation of the OTS and demanded repayment of the entire outstanding dues. As a result, a large amount, along with interest, costs, and expenses, became due and payable by the Corporate Debtor to SBI upon cancellation of the OTS. Meanwhile, PNB had filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016,” the NCLT’s order stated.
The NCLT bench comprising Justice V. G. Bisht (Judicial Member) and Prabhat Kumar (Technical Member) noted that the default dated back to October 2018, following a legal notice issued by SBI. While the OTS temporarily postponed enforcement, it was declared void in July 2022 due to non-compliance, and the liability under the guarantee remained intact.
A detailed report filed by Resolution Professional Mr. Kshitiz Gupta confirmed the validity of the claim and the eligibility of the petition under IBC provisions. The tribunal also referred to the Supreme Court’s judgment in Lalit Kumar Jain vs. Union of India, affirming that the approval of a resolution plan does not absolve personal guarantors of their liabilities.
Further, the tribunal found that the resolution plan for PDIL submitted by IHL Lifesciences Pvt. Ltd. and Anant Kumar Bomb had explicitly preserved the lenders’ rights to proceed against personal guarantors for unrecovered amounts.
“Upon perusal of several documents on record, it is clearly established that the Corporate Debtor has committed defaults in the repayment of the loan amount granted by the creditors. Manohar Lal Gupta, the personal guarantor to Parenteral Drugs (India) Limited (PDIL), has also committed default in the repayment of debt due to the financial creditor after invocation of the guarantee. The application filed by the creditor satisfies the requirements as set out in Section 95 of the Code,” the NCLT maintained in its order.
