No Judicial Determination Required In RP's Examination Of Personal Guarantor Insolvency Applications: NCLAT Chennai
Mohd.Rehan Ali
16 July 2025 3:45 PM IST
The National Company Appellate Tribunal (NCLT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has held that the process of examining an insolvency application against a personal guarantor by the Resolution Professional u/s 97 does not involve any judicial determination. Hence, the directions issued under...
The National Company Appellate Tribunal (NCLT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has held that the process of examining an insolvency application against a personal guarantor by the Resolution Professional u/s 97 does not involve any judicial determination. Hence, the directions issued under the provision are not appealable under section 61 of the IBC.
Background of the Case
The appeal arises out of similar orders passed by the NCLT, Chennai, directing the Interim Resolution Professional (IRP) to examine applications filed u/s 95 of the IBC and to submit recommendations as per section 97(6). The NCLT also directed the IRP to do it within the time prescribed under section 99(1).
Appeals were accompanied by the applications seeking condonation of delay, which was allowed by the tribunal.
The appellant contended that the adjudicating authority's order directing the resolution professional to examine the application u/s 97(6) of the IBC amounts to judicial determination.
They highlighted that though the directions appear to be procedural in nature, they impact their rights as personal guarantors.
Observations of the NCLAT
The bench observed that none of the parameters contemplated u/s 97 at all at any stage deal with the aspect of determination of any rights of the parties, hence, the impugned order cannot be considered to be appealable u/s 61 of the IBC.
Referring to the Hon'ble Supreme Court's ruling in the case of Dilip B. Jiwrajka v. Union of India, the bench ruled that the proceedings between sections 95 and 99 of the IBC are purely administrative, and no judicial administration occurs until the matter reaches the admission stage u/s 100.
The bench discussed that the NCLT had not decided any substantive issue or right of the parties, and the direction merely instructed the RP to perform duties u/s 97 and submit a report u/s 99.
The tribunal observed that “the appeals would be dismissed, and it goes without saying that this would be without prejudice to the Appellants, right to contest on merits if permissible under law at the stage when the proceedings reach the stage of Section 100 of the I & B Code.”
Since no judicial determination was made and the orders were merely the procedural steps, hence, appeals under Section 61 are premature and not maintainable.
Case Title: Ajay Agarwal v. State Bank of India and Anr.
Case Number: Company Appeal (AT) (CH) (Ins) No. 291 of 2025 & I.A. No. 834, 837, 835, 836, & 838 of 2025
For Appellant: Mr. P.S Raman, Senior Advocate, Mr. Rajesh Bohra, Advocate.
Bench: Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical)
Judgment Date: 30/06/2025