Borrower Can't Plead Non-Service At Previous Address When Change Of New Address Is Not Communicated To Creditor: NCLAT

The present appeal has been filed under section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) against an order passed by National Company Law Tribunal (NCLT) Chandigarh by which it proceeded ex-parte against the personal guarantor and admitted an application under section 95 of the IBC.

The Appellant submitted that No document was placed on record by the creditor to substantiate the fact that any demand was ever raised by the creditor towards the Applicant/ Personal Guarantor and as such the Application filed by the Respondent No.1 was premature and such impugned order is liable to be recalled.

It was further argued that In the service affidavit, the Respondent no. 2/ Resolution Professional had stated that the report under Section 99 has been served upon the applicant whereas no such service report was ever served upon the applicant

Per contra, the Respondent submitted that the Appellant was well aware about the pendency of the proceedings as far back as 20.02.2024 and had read and replied to the message sent by the Resolution Professional.

It was further argued that from the record of the present matter, it is abundantly clear the Appellant was aware of the proceedings under Section 95 and therefore, the present Appellant based on alleged non-delivery of demand notice or the report under Section 99 is not maintainable.

The Tribunal observed that in the absence of information to the creditor about the change in address the borrower/guarantor cannot take benefit or claim non-delivery of letters/notices sent by the creditor. In the present case the appellant has been playing hide & seek with the bank and has gone incognito by changing the address without any information to its creditors. In such events the guarantor has no right to take the defence of non-delivery of demand notice sent by the answering respondent.

The Tribunal observed that the Appellant deliberately avoided participating in the proceedings, withheld information and failed to cooperate with the Respondent No. 2 despite multiple opportunities. Such conduct which was driven by malicious intent disentitles the Appellant from any relief.

It further observed that the submission that Omakara Assets, an assignee of the debt from Stressed Assets Stabilisation Fund (SASF) cannot file an application under section 95 of the IBC is untenable. As per section 5(3) of the SARFAESI, an assignee steps into the shoes of an assignor and acquires all the rights in respect of the debt. Furthermore, it is not the case of the Appellant that the SASF continued to proceed with the application under section 95 of the IBC after the assignment as the assignment occurred after the NCLT had reserved the orders.

It held that “In the facts and circumstances of the case we find that the Appellant as a personal guarantor, has been deliberately avoiding participation in the Section 95 proceedings and has falsely claimed to be unaware of the pending proceedings. Appellant has also filed an Application before the Adjudicating Authority seeking recall of the same impugned Order date 12.09.2024. Appellant is approaching multiple fora to delay the proceedings against him and doesn't deserve any relief.”

Accordingly, the present appeal was dismissed.

Case Title: Sh. Sumeet Juneja Versus Stressed Assets Stabilisation Fund (SASF) and Ors.

Case Number: Company Appeal (AT) (Insolvency) No. 2169 of 2024

Judgment Date: 25/08/2025

Click Here To Read/Download The Order