Ansal Properties and Infrastructure Limited vs Mr. Rajesh Ramani - Given the aforesaid legal position, we do not think that the provisions of statutory set-off in terms of Order VIII Rule 6 of CPC or insolvency set-off as permitted by Regulation 29 of the Liquidation Regulations can be applied to the Corporate Insolvency Resolution Process.

 NCLT ND (2025.07.15) in Ansal Properties and Infrastructure Limited vs Mr. Rajesh Ramani [(2026) ibclaw.in 1034 NCLAT, Company Appeal (AT) (IA-118/2024 In (IB)-113(ND)/2021] held that; 

• Given the aforesaid legal position, we do not think that the provisions of statutory set-off in terms of Order VIII Rule 6 of CPC or insolvency set-off as permitted by Regulation 29 of the Liquidation Regulations can be applied to the Corporate Insolvency Resolution Process.

• The aforesaid rule would be, however, subject to two exceptions or situations. The first, if at all it can be called an exception, is where a party is entitled to contractual set-off, on the date which is effective before or on the date the Corporate Insolvency Resolution Process is put into motion or commences.

• The Corporate Insolvency Resolution Process does not preclude application of contractual set-off. During the moratorium period with initiation of the Corporate Insolvency Resolution Process, recovery, legal proceedings etc. cannot be initiated, enforced or remain in abeyance. Besides the moratorium effect, the terms of the contract remain binding and are not altered or modified.

• The Resolution Professional takes the debtor’s property subject to all clogs and fetters affecting it in the hands of the debtor.

• The second exception will be in the case of ‘equitable set-off’ when the claim and counter claim in the form of set-off are linked and connected on account of one or more transactions that can be treated as one. The set-off should be genuine and clearly established on facts and in law, so as to make it inequitable and unfair that the debtor be asked to pay money, without adjustment sought that is fully justified and legal.

• The amount to be adjusted should be a quantifiable and unquestionable monetary claim, as the Corporate Insolvency Resolution Process is a time-bound summary procedure. It is not a civil suit where disputed questions of law andf acts are adjudicated after recording evidence. Set-off of this nature does not require legal proceedings.

• Further, set-off of money is to be given against money alone. It will not apply to assets. Lastly, being an equitable right, it can be denied when grant of relief will defeat equity and justice.

• Thus, while accepting contractual and transactional set-off on the conditions specified, we have struck a balance with the doctrines of pari passu and anti-deprivation, which we believe is just and fair. Insolvency set-off in terms of Regulation 29 of the Liquidation Regulations is statutory.

Excerpts of the Order; 

# 1. This application has been filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) read with Rule 11 of NCLT Rules, 2016 by the Applicant seeking urgent directions in the nature of (a) reversal of illegal set-off allowed by the Respondent; and (b) direction to IBBI for initiation of disciplinary proceedings against the Respondent for acting in contravention to the provisions of the Insolvency and Bankruptcy Code, 2016, at the behest of a shareholder of the Corporate Debtor.

A. Submissions of the Applicant:

# 2. The Applicant herein is one of the leading Real Estate and Infrastructure Development Company in the country, having vast experience in the real estate industry. The Applicant is a shareholder of the Corporate Debtor holding 15.81% shares of the Corporate Debtor. The Corporate Debtor, Ansal Urban Condominiums Private Limited, was incorporated by Ansal Landmark Township Private Limited, which is a Joint Venture Company formed between the Ansal group and the Landmark group. The Corporate Debtor was incorporated for the purpose of the development of real estate project, namely, Sushant Aquapolis, situated at Ghaziabad. Therefore, the Corporate Debtor has two groups of shareholders i.e., the Landmark group through Ansal Landmark (Karnal) Township Private Limited (“ALKTPL”) and the Ansal Group, including the Applicant herein.

# 3. On 10.03.2022, the Corporate Insolvency Resolution Process (“CIRP”) in relation to the affairs of the Corporate Debtor was commenced by an order passed by this Adjudicating Authority in (IB)-113(ND)/2021 and the Respondent herein was appointed as the Interim Resolution Professional of the Corporate Debtor and later confirmed as the Resolution Professional of the Corporate Debtor.

# 4. The primary grievance of the Applicant herein is that the Respondent has acted for the benefit of and at the behest of Landmark group inasmuch as the Respondent has acted contrary to the provisions of the IBC and has given preferential treatment to ALKTPL. The said action on the part of the Respondent is not only in violation of the provisions of the IBC but are also detrimental to the stakeholders of the Corporate Debtor, including the Applicant. During the CIRP, the Respondent had engaged APT and Co LLP to conduct a Transaction and Forensic Audit of the Corporate Debtor. APT and Co LLP submitted its report on 15.02.2023 (“the Audit Report”).

# 5. The Applicant’s case is that the Respondent/Resolution Professional relied upon the report dated 15.02.2023 submitted by APT and Co. LLP and allowed the set-off amounting to Rs.34,54,53,125/-. In support of its contentions, the Applicant referred to Page 64 of the Audit Report, which reads as under:-

“Transaction with Ansal Landmark (Karnal) Townships Private Limited (ALKTPL)

I. ALKTPL has a receivable balance (debit balance) of Rs. 47,31,62,114/- as on 10th March, 2022 as per the books of accounts of AUCPL. The amount of Rs. 47.92 Crores was transferred on 31st July, 2015 to ALKTPL by AUCPL to be utilized as consideration for acquiring 10 acres of contiguous land parcel. Thereafter, it has been communicated by ALKTPL that the said contiguous land parcels were not available and therefore acquisition contemplated under the debenture subscription agreement had become Impossible.

II. Further a letter dated 21st March, 2022 has been shared by RP in which ALKTPL have asked to reconcile their balance as on 10th March, 2022 on the ground that Dalmia Family Office Trust (DFOT) (formerly known as Mridu Hari DalmiaParivar Trust) had paid Rs. 34,54,53,125 to AUCPL on behalf of ALKTPL and when DFOT was unable to recover the amount from AUCPL, DFOT initiated arbitration proceedings against ALKTPL and was able to secure an award dated 25.02.2022, in their favour. The said Award has held ALKTPL liable to make good said payments to DFOT. Therefore, in books of accounts for FY 21-22, ALKTPL, will be debiting the same directly to AUCPL, rather than through DFOT.

III. Dalmia Family Office Trust (DFOT) (formerly known as Mridu Hari DalmiaParivar Trust) is having a payable balance (credit balance) of Rs. 34,54,53,125 as on 10th March, 2022. The amount has been utilised by AUCPL for payment of interest on debentures and same is reflected as a loan in books of accounts.

IV. After considering the above facts, the net receivable balance (debit balance) of ALKTPL is Rs. 12,77,08,989 as on 10th March, 2022.”

# 6. The Applicant submitted that the Respondent reconciled and allowed set-off of the account of ALKTPL. The Applicant contended that the Respondent reduced the receivable balance from ALKTPL by Rs. 34,54,53,125/- on the basis of the letter received from ALKTPL, bypassing the provision of the Code without verifying the existence and authenticity of the Arbitration Award.

# 7. The Respondent ought to have considered the fact that Mr. Gaurav Dalmia is one of the Directors of ALKTPL, and his father Mr. Mridul Hari Dalmia is the Trustee of DFOT, which shows that ALKTPL and DFOT are related parties and the arbitration proceedings were conducted between two related parties owned and controlled by one family. Therefore, the Respondent could not have allowed the set off, which resulted in the reduction of the corpus of the Corporate Debtor. In this regard, the Applicant relied upon the judgment of the Hon’ble NCLAT passed in “Vijay Kumar V. Iyer Vs Bharti Airtel Ltd & Ors.”, in Company Appeal (AT) (Ins.) No. 530 of 2019 wherein it was held that when a moratorium is in force, any dues owed to the Corporate Debtor cannot be set off and directed reversal of the transaction.

B. Submissions of the Respondent:

# 8. The Respondent filed a reply affidavit denying the allegations made by the Applicant in the application. The Respondent at the outset submitted that the Applicant has no locus to file the present application. The Applicant has filed the present application as a counterblast to the applications (i.e. IA-3414/2023 and IA-3423/2023) filed by the Respondent, Resolution Professional pertaining to PUFE transactions.

# 9. It is submitted that the Applicant, i.e., Ansal Properties and Infrastructure Limited, is the erstwhile Developer, license holder and promoter of the Corporate Debtor and currently holds 15.81% shareholding in the Corporate Debtor. In this Application, the Applicant has disputed the set-off of Rs. 34,54,53,125/- between the Corporate Debtor and one of its shareholders, Ansal Landmark (Karnal) Township Pvt. Ltd. (“ALKTPL”). The Applicant alleges differential and preferential treatment by the Respondent in favour of ALKTPL. Consequently, the Applicant has prayed for directions to be issued to the Insolvency and Bankruptcy Board of India (“IBBI”) to initiate disciplinary proceedings against the Respondent.

# 10. It is further contended by the Respondent that the pleadings in I.A. No. 882 of 2023, filed by one Katra Realtors Pvt. Ltd. (in short “Katra”), an entity controlled by the Applicant, and the pleadings in the present application are identical.

# 11. This Adjudicating Authority vide order dated 24.01.2024 dismissed I.A. No. 882 of 2023 and the said order was upheld by the Hon’ble NCLAT vide order dated 04.03.2024 in Company Appeal (AT) (Ins.) No.382 of 2024.

# 12. The Respondent contended that the Resolution Professional of the Corporate Debtor did not get any co-operation from the shareholders of the Corporate Debtor for effecting the handover of the affairs of the Corporate Debtor after initiation of the CIRP, since the Corporate Debtor had no Directors.

# 13. The Resolution Professional filed I.A. No. 3304 of 2022 under Section 19(2) of the Code seeking directions to the Applicant and Katra Realtors Pvt. Ltd. (shareholders of the Corporate Debtor) to extend co-operation and provide all the relevant documents to the Respondent. This Adjudicating Authority vide order dated 19.12.2023 disposed of the I.A. No. 3304 of 2022 and directed the Applicant and Katra to extend necessary co-operation and provide all the relevant data and documents records to the Respondent. However, both the Applicant and Katra Realtors Pvt. Ltd. failed to provide any information, relevant data, and documents, etc.

# 14. The Respondent/Resolution Professional, upon perusal of the available records of the Corporate Debtor came across a Memorandum of Understanding (MoU) dated 24.07.2015 executed by the Corporate Debtor and Ansal Landmark (Kamal) Township Pvt. Ltd. (“ALKTPL”) (in short “July MoU”), the MoU dated 31.12.2015 (“December MoU”) executed by the Corporate Debtor and Dalmia Family Office Trust (“DFOT”) along with the Arbitral Award dated 25.02.2022 between ALKTPL and DFOT (“Arbitral Award”), along with a letter dated 01.03.2022 issued by ALKTPL to the Corporate Debtor.

# 15. It came to light that, under the 2015 MoU, the Corporate Debtor transferred a sum of INR 47.92 Crores to ALKTPL for acquiring land on behalf of the Corporate Debtor. Thereafter, ALKTPL, through DFOT, advanced a sum of INR 34,54,53,125/- to the Corporate Debtor under the December MoU. Subsequently, a dispute arose inter-se between DFOT and ALKTPL under the December MoU which apparently led to the arbitration proceeding and passing of an Arbitral Award. The Arbitral Award records that the dispute arose when ALKTPL failed to repay the sum of INR 34,54,53,125/- advanced by DFOT to the Corporate Debtor, on behalf of ALKTPL. This Arbitral Award, according to the Respondent, has not been challenged by ALKTPL and has attained finality.

# 16. Further, vide letter dated 18.03.2022 and 21.03.2022, the DFOT and ALKTPL, respectively, informed the Respondent-Resolution Professional that the parties have acted in accordance with the Arbitral Award and made appropriate entries in their books of account. These transactions have taken place prior to the commencement of the CIRP of the Corporate Debtor as indicated in the letter dated 01.03.2022 issued by ALKTPL to the Corporate Debtor.

# 17. Subsequently, in July 2022, the Respondent, on the advice of the CoC, engaged the services of APT & Co LLP for conducting a transaction and forensic audit of the accounts of the Corporate Debtor. The transaction and Forensic Audit Report (“Audit Report”) was finalized on 15.02.2023 and shared with the Respondent, Resolution Professional.

# 18. Notably, the Audit Report does not contain any adverse observation in relation to the transaction amongst the Corporate Debtor, ALKTPL and DFOT.

# 19. The accounts of the Corporate Debtor prior to the commencement of the CIRP were subjected to the statutory audit in compliance with applicable law and were finalized on 06.06.2023, which was not objected to by the CoC, which includes about 660 home buyers.

C. Analysis and Findings:

# 20. We have heard the submissions of Mr. Abhishek Anand, Ld. Counsel appearing on behalf of the Applicant as well as Mr. Sameer, Rohtagi, Ld. Counsel appearing on behalf of the Respondent/Resolution Professional, and perused the records.

# 21. Before analysing the case, it is pertinent to refer to the following aspects:

A. This application was listed on 03.04.2025, seeking clarification from the parties, and the following order was passed:

“IA-118/2024:-

This application has been listed seeking clarification with respect to the reversal of illegal set off of Rs. 34,54,53,125/-.

We have heard the submissions of Mr. Abhishek Anand, Learned Counsel appearing for the Applicant as well as Mr. Shivanshu Kumar, Learned Counsel appearing for the Resolution Professional. Mr. Rajesh Ramnani, the Resolution Professional has appeared in person virtually.

Learned Counsel for the parties seek to place on record an affidavit with respect to the status of the case, within two weeks. Mr. Anand, Learned Counsel also submitted that CIRP has been initiated against the Applicant in this application i.e. Ansal Properties and Infrastructure Limited, in CP No. IB-558/ND/2024 vide order dated 22.02.2025 passed by Court IV and Mr. Navneet Kumar Gupta, has been appointed as the IRP and he sought one time file a copy of the said order. Time granted.

List the matter on 06.05.2025.”

# 22. In compliance of the order dated 03.04.2025, the Applicant/Ansal Properties and Infrastructure Limited and Respondent/Resolution Professional filed respective affidavits clarifying the issues raised by this Adjudicating Authority. The Applicant has placed on record a copy of the CIRP Order dated 25.02.2025 of Ansal Properties and Infrastructure Limited.

# 23. Mr. Abhishek Anand, Ld. Counsel appearing on behalf of the Applicant submitted that the Applicant is a shareholder having 15.81% shares of the Corporate Debtor. The Applicant in this application is agreed with the action of the Respondent/Resolution Professional in reversal of the set-off of Rs.34,54,53,125/- allowed by the Respondent/Resolution Professional in derogation to the provisions of the Insolvency and Bankruptcy Code, 2016 and also seeking a direction to the IBBI for initiation of disciplinary proceedings against the Respondent/ Resolution Professional for having acted in contravention to the provisions of the IBC, 2016.

# 24. The Ld. Counsel for the Applicant submitted that the Resolution Professional carried out a transaction cum Forensic Audit Report of the Corporate Debtor. One of the shareholders of the Corporate Debtor i.e. Ansal Landmark (Karnal) Township Private Limited, (“ALKTPL”) addressed letter dated 21.03.2022 to the Respondent asking for reconciliation and set-off of the account of ALKTPL on the ground that another entity, namely Dalmia Family Office Trust (“DFOT”), had paid certain sums to the Corporate Debtor, purportedly on behalf of ALKTPL and the said entity had initiated arbitration proceedings against ALKTPL wherein an Award was passed. On the basis of the Arbitral Award, ALKTPL will be debiting the said amount directly to the Corporate Debtor.

# 25. It is submitted by the Applicant that the Respondent/Resolution Professional, without verifying the contents of the letter in an independent and neutral manner, accepted the request for reconciliation by ALKTPL and reduced the receivable balance from ALKTPL after the commencement of CIRP of the Corporate Debtor. It is further submitted that the said reconciliation/set-off has been illegally allowed by the Respondent/Resolution Professional during the moratorium period. Therefore, the action on the part of the Respondent/Resolution Professional is arbitrary and motivated by factors other than the resolution of the Insolvency of the Corporate Debtor. It is contended that the Respondent/Resolution Professional reconciled the accounts of ALKTPL even though no claim was filed by ALKTPL.

# 26. Further, it is seen from the books of accounts of the Corporate Debtor that ALKTPL obtained an unsecured loan of Rs. 47,31,62,114/- from the Corporate Debtor. Further, the Respondent thereafter represented to the auditors that after the initiation of CIRP, ALKTPL had addressed a letter to the Respondent asking for reconciliation on the ground that another entity, namely Dalmia Family Office Trust, had paid certain sums to the Corporate Debtor, purportedly on behalf of ALKTPL, and the said entity had initiated arbitration proceedings against ALKTPL and based on the award passed therein, ALKTPL will be debiting the amount directly to AUCPL. The Respondent/Resolution Professional, based on this letter, has reduced the receivable balance from ALKTPL.

# 27. Mr. Sameer, Rohtagi, Ld. Counsel appearing on behalf of the Respondent/Resolution Professional submitted that the present application is not maintainable and the Applicant has no locus to file the present application, inasmuch as the Applicant is a minor shareholder holding 15.82% of the share capital of the Corporate Debtor. The Applicant is trying to delay the process and indirectly challenging the resolution plan approved by the CoC.

# 28. Ld. Counsel for the Respondent further submitted that the Applicant had knowledge of the forensic audit report dated 15.02.2023 at least since June 2023, when the Respondent filed PUFE applications (i.e., IA-3414/2023 and IA-3423/2023). The Applicant, after the lapse of more than 7 months, has filed the present application, which is barred by delay and laches.

# 29. It is contended on behalf of the Respondent/Resolution Professional that the Applicant seeks to reopen the issues raised in I.A. No. 882/2023. It is submitted that I.A. No. 882/2023 was filed by one Katra Realtors Private Limited (in short “Katra”), an entity controlled by the Applicant and the pleadings in the said application are identical to the present application. Further I.A. No. 882 of 2023 was dismissed by this Adjudicating Authority vide order dated 24.01.2024 and the said order was upheld by the Hon’ble NCLAT vide order dated 04.03.2024 in Company Appeal (AT) (Ins.) No.382 of 2024.Therefore, the Applicant is prevented from raising the same issue and allegations again. Further, the present application is barred by delay and laches since the Applicant seeks to indirectly challenge the resolution plan approved by the CoC for which the Applicant Company has no locus.

# 30. From the perusal of the pleadings and the arguments advanced by the Ld. Counsel appearing for both parties, the following issues arise for determination:

• (i) Whether the set-off allowed by the Resolution Professional is during the moratorium period and therefore, illegal and contrary to the provisions contained in Section 14 of the Code.

• (ii) Whether the Resolution Professional is correct in law in allowing the set-off based on the letter dated 21.03.2022 and the transaction and the transaction and Forensic Audit Report dated 15.02.2023.

• (iii) Whether the Applicant is precluded from filing the present application in view of the dismissal of IA-882/2023.

# 31. The Issue Nos. 1 and 2 are linked to each other and are answered as under:

# 32. It is an admitted position that the CIRP of the Corporate Debtor was commenced by an order dated 10.03.2022 passed by this Adjudicating Authority in C.P. (IB) No.113/2021, and hence, the moratorium under Section 14 of the Code, 2016, was kicked in with effect from 10.03.2022. The Transaction and Forensic Audit of the Corporate Debtor conducted by APT and Co LLP was submitted on 15.02.2023. The Respondent/Resolution Professional received a letter dated 21.03.2022 from ALKTPL requesting the Respondent/Resolution Professional to reconcile and allow set-off of the account of ALKTPL.

# 33. It is also an admitted case of the Respondent/Resolution Professional that basing on the audit report dated 15.02.2023 and letter dated 21.03.2022, Respondent/Resolution Professional has reconciled and allowed the set-off of the account of ALKTPL of Rs. 34,54,53,125/-. Thus, it is amply clear that the Respondent/Resolution Professional allowed the set-off much after the commencement of CIRP and during the moratorium period. However, the records show that the transactions in question took place much before the initiation of the CIRP and the Arbitral Award was passed on 25.02.2022, which is also before the commencement of CIRP and coming into force of the moratorium under Section 14 of the Code.

# 34. The Respondent/Resolution Professional, while carrying out its duties under Section 25(2), came across the Arbitral Award dated 25.02.2022, which was passed in arbitration proceedings between ALKTPL and DFOT. The Respondent/Resolution Professional also came across certain other Memorandum of Understanding involved in the CIRP of the Corporate Debtor. The Respondent/Resolution Professional also came across letters dated 01.03.2022, 18.03.2022 and 21.03.2022 and on the basis of the said letters and other documents, the Respondent/Resolution Professional came to know about the transaction in question. It is thus evident that the transaction in question took place in the year of 2015 and the Respondent/Resolution Professional granted set-off on the basis of the said transaction and therefore, it cannot be said that the set-off was hit by Section 14 moratorium.

# 35. The Respondent has relied upon a judgment passed by the Hon’ble Supreme Court of India in Civil Appeal No. 3088 and 3089 of 2020 in the matter of “Bharti Airtel vs. Vijaykumar V. Iyer and Ors.”. While dealing with an issue of set-off, the Hon’ble Supreme Court of India has examined the different concepts of set-off including insolvency set-off. The relevant paragraphs of the judgment are extracted below:

• “30. Given the aforesaid legal position, we do not think that the provisions of statutory set-off in terms of Order VIII Rule 6 of CPC or insolvency set-off as permitted by Regulation 29 of the Liquidation Regulations can be applied to the Corporate Insolvency Resolution Process. The aforesaid rule would be, however, subject to two exceptions or situations. The first, if at all it can be called an exception, is where a party is entitled to contractual set-off, on the date which is effective before or on the date the Corporate Insolvency Resolution Process is put into motion or commences. The reason is simple. The Corporate Insolvency Resolution Process does not preclude application of contractual set-off. During the moratorium period with initiation of the Corporate Insolvency Resolution Process, recovery, legal proceedings etc. cannot be initiated, enforced or remain in abeyance. Besides the moratorium effect, the terms of the contract remain binding and are not altered or modified.

• 31. The foundation of contractual set-off is based on the same ground as in the case of equitable set-off, which is impeachment of title, albeit contractual set-off is a result of mutual agreement that permits set-off and adjustment. Therefore, if a debtor’s title to sue is impeached before the Corporate Insolvency Resolution Process is set into motion, so should the title of the Resolution Professional, who in terms of Section 25 of the IBC has the duty to preserve and protect assets of the corporate debtor, including continuing the business operations of the corporate debtor. The Resolution Professional takes the debtor’s property subject to all clogs and fetters affecting it in the hands of the debtor.

• 32. The second exception will be in the case of ‘equitable set-off’ when the claim and counter claim in the form of set-off are linked and connected on account of one or more transactions that can be treated as one. The set-off should be genuine and clearly established on facts and in law, so as to make it inequitable and unfair that the debtor be asked to pay money, without adjustment sought that is fully justified and legal. The amount to be adjusted should be a quantifiable and unquestionable monetary claim, as the Corporate Insolvency Resolution Process is a time-bound summary procedure. It is not a civil suit where disputed questions of law and facts are adjudicated after recording evidence. Set-off of this nature does not require legal proceedings. Further, set-off of money is to be given against money alone. It will not apply to assets. Lastly, being an equitable right, it can be denied when grant of relief will defeat equity and justice.

• 33. We would in fact borrow the term ‘transactional set-off’46 instead of equitable set-off, when we describe the second exception. The reason is that the second exception refers to an ascertained amount, which is a requirement for legal set-off under Order VIII Rule 6 of CPC and at the same time relies on equitable right when the statute is silent and there is no reason to deny set-off under the common law. It is an equitable right because the transactions are close and connected, harbingering the claim and the counterclaim. It would be manifestly unjust to bifurcate the connected transactions to accept and enforce the claim of one party without adjusting the amount due to the second party. This, in our opinion, does not contradict the eclipse by way of moratorium, because the transactions are treated as singular and one. When transactions are closely connected, a claim for transactional set-off during the moratorium period on a claim by the Resolution Professional, is by way of a defence to protect the legitimate expectation and respect legal certainty.

• 34. Thus, while accepting contractual and transactional set-off on the conditions specified, we have struck a balance with the doctrines of pari passu and anti-deprivation, which we believe is just and fair. Insolvency set-off in terms of Regulation 29 of the Liquidation Regulations is statutory.”

# 36. From the perusal of the Judgment of the Hon’ble Supreme Court of India, it is clear that the set-off can be allowed by the Resolution Professional during the moratorium period in the CIRP of the Corporate Debtor.

# 37. From the submissions made by the Learned Counsel representing the Respondent/Resolution Professional, it emerges that the Applicant’s plea for reversal of set-off is premised on the assertion that such set-off was effected by the Resolution Professional during the course of the Corporate Insolvency Resolution Process (“CIRP”). This allegation is entirely unfounded and devoid of merit. No set-off was permitted by the Respondent in respect of any transaction during the CIRP. The Respondent merely discharged an administrative duty of compiling the accounts of the Corporate Debtor, strictly based on existing records pertaining to transactions finalized prior to the commencement of the CIRP.

# 38. It is pertinent to note that the last audited financial statements of the Corporate Debtor date back to the financial year 2014–15. At the initiation of the CIRP, owing to the absence of any provisional balance sheet, the Respondent was not in a position to formulate valuation reports as mandated under Regulation 27 of the CIRP Regulations. In such circumstances, the only viable course available to the Resolution Professional was the reconstruction of the Corporate Debtor’s accounts.

# 39. On the basis of the above analysis, we do not find any irregularity or deficiency in the actions or decisions of the Respondent/Resolution Professional. Accordingly, we are of the view that the course of action adopted by the Respondent/Resolution Professional in the discharge of its statutory duties under Section 25(2) of the Insolvency and Bankruptcy Code, 2016 is well within the legal parameters conferred under the Code.

# 40. In view of the foregoing analysis, Issue Nos. 1 and 2 are answered in the negative.

# 41. It is a matter of record that Interlocutory Application No. 882 of 2023 was filed by Katra Realtors Private Limited, an entity under the effective control of the Applicant, with pleadings that are materially identical to those in the present application. This Adjudicating Authority, by order dated 24.01.2024, dismissed the said application, and the dismissal was subsequently affirmed by the Hon’ble National Company Law Appellate Tribunal (NCLAT) by its order dated 04.03.2024 in Company Appeal (AT) (Insolvency) No. 382 of 2024. In view of the above, the Applicant is precluded from re-agitating the same allegations and issues which have already been conclusively determined.

# 42. In view of the above discussion, Issue No. 3 is answered accordingly.

# 43. In view of the above, this Adjudicating Authority deems it unnecessary to address the present applications, as they do not align with the spirit of the IBC. Furthermore, it appears that the Applicant has filed the application with the intention of disrupting and derailing the CIRP of the Corporate Debtor.

# 44. We are of the considered view that if the present applications are allowed, then this Adjudicating Authority will continue to receive further similar applications, and the case will remain unresolved. Additionally, it will create obstacles for the Successful Resolution Applicant in executing the Resolution Plan.

# 45. We also expect that the Applicant along with Respondent/Resolution Professional, will make their best efforts to uphold the essence of the Code and, in the interest of justice, expedite the process of CIRP.

# 46. It is ordered as follows:

i. In view of the reasons mentioned above, the IA-118/2024 stand dismissed.

ii. The Registry is directed to send a copy of this order to the IBBI for their record.

iii. A certified copy of this order may be issued, if applied for, upon compliance with all requisite formalities. No order as to costs.

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Kamlesh Rani Singla vs Praveen Kumar Garg - We also note that the Transfer Application specifically raised a threshold and objection of jurisdiction, contending that proceedings under Section 95 IBC against a Personal Guarantor cannot be maintained before NCLT New Delhi when the CIRP of the Corporate Debtor is pending before NCLT Chandigarh, which alone has exclusive territorial and subject-matter jurisdiction under Section 60(2) of the Code.

  NCLAT (20126.09.09) in Kamlesh Rani Singla vs Praveen Kumar Garg [(2026) ibclaw.in 1034 NCLAT, Company Appeal (AT) (Insolvency) No. 275 of 2026] held that; 

• We also note that the Transfer Application specifically raised a threshold and objection of jurisdiction, contending that proceedings under Section 95 IBC against a Personal Guarantor cannot be maintained before NCLT New Delhi when the CIRP of the Corporate Debtor is pending before NCLT Chandigarh, which alone has exclusive territorial and subject-matter jurisdiction under Section 60(2) of the Code.

• In this case we find that the proceedings against the Corporate Debtor were going on in NCLT Chandigarh in one of the benches and simultaneously proceedings against the personal guarantor have been initiated in NCLT Delhi in another bench. It would have been appropriate that this application should have been dismissed as non-maintainable at the stage of the admission itself and the applicant should have been advised to file it before the appropriate bench, that is in Chandigarh.

Excerpts of the Order; 

The present Appeal of the Suspended Director cum Personal Guarantor of the Corporate Debtor, has been preferred involving Section 421 of the Companies Act, 2013 (hereinafter referred as “the Act”) against the order dated 05.12.2025 (hereinafter referred to as the “Impugned Order”) passed by Ld. National Company Law Tribunal, New Delhi, Single Principal Bench in TA(IBC)-50(PB)/2024, arising out of CP(IB) No. 419/ND/2023, titled “Praveen Kumar Garg v. Kamlesh Rani Singla”. By way of the Impugned Order dated 05.12.2025, the Ld. Principal Bench has:

• i) Dismissed T.A. (IBC) No. 50 (PB)/2024, filed under Rule 16(d) of the National Company Law Tribunal Rules, 2016 read with Sections 61(1) and 61(2) of the Insolvency and Bankruptcy Code, 2016 and Rule 11 of the NCLT Rules, 2016, seeking transfer of C.P. (IB) No. 419/ND/2023, titled “Praveen Kumar Garg v. Kamlesh Rani Singla”, from the Hon’ble NCLT, New Delhi Bench-II to the Hon’ble NCLT, Chandigarh Bench (Court-II); and

• ii) Closed the said transfer application by placing reliance upon the order dated 16.10.2025 passed by the Hon’ble Gujarat High Court in R/Special Civil Application No. 11679 of 2024,

Submissions of the Appellant

# 2. The Appellant submits that, this Appellate Tribunal is empowered under Section 421 of the Companies Act, 2013 to entertain and adjudicate the present Appeal against the impugned order dated 05.12.2025. It argued that in addition to the statutory appellate jurisdiction, this Hon’ble Tribunal also possesses inherent powers bestowed on it under Rule 11 of the National Company Law Appellate Tribunal Rules, 2016, which enables to exercise inherent powers and to pass such orders as may be necessary for the proper adjudication of the matter and for securing the ends of justice.

# 3. The present Appeal is not barred by limitation and has been filed within the period prescribed under Section 421(3) of the Companies Act, 2013. The cause of action to prefer the present Appeal arose upon the passing of the Impugned Order on 05.12.2025, and the Appellant has approached this Hon’ble Tribunal within the statutory timeline of 45 days. Accordingly, the Appeal is well within limitation.

# 4. M/s. Laxmi Pipes Ltd., a company incorporated under the provisions of the Companies Act, having its registered office at Bhiwani Road, Hansi, District Hisar, Haryana-125033, is presently undergoing Corporate Insolvency Resolution Process (CIRP). The affairs of the Corporate Debtor are presently being managed through its Resolution Professional appointed pursuant to initiation of CIRP. The CIRP of Laxmi Pipes Ltd. is pending adjudication before the Hon’ble National Company Law Tribunal, Chandigarh Bench-II, in CP (IB) No. 107/Chd/Hry/2023, titled “Praveen Kumar Garg v. Laxmi Pipes Ltd.”, which was admitted by an order dated 17.05.2023 under Section 9 of the Insolvency and Bankruptcy Code, 2016. Mr. Deepak Thukral was appointed as the Interim Resolution Professional, a moratorium under Section 14 IBC was declared, and the Corporate Debtor admitted an operational debt of ₹1,14,27,112/- payable to the Respondent No.1.

# 5. Apart from the above proceedings, Respondent No.1 (Praveen Kumar Garg, Proprietor of M/s GSV Products) filed CP(IB) No. 419/ND/2023 invoking Section 95 of IBC against Appellant (Personal Guarantor/Suspended Director) before NCLT New Delhi Bench II, triggering mandatory transfer jurisdiction u/s 60(2) IBC. Respondent No. 1 initiated proceedings under Section 95 of the Code against the Appellant in his alleged capacity as Personal Guarantor and Suspended Director before the Hon’ble National Company Law Tribunal, New Delhi, Bench-II, instead of filing the same before the Hon’ble National Company Law Tribunal, Chandigarh Bench. The aforesaid proceedings were initiated deliberately and with full knowledge of the fact that the Respondent No. 1 had already instituted proceedings against the Corporate Debtor before the Hon’ble NCLT, Chandigarh Bench vide in shape of CP (IB) No. 107/Chd/Hry/2023, Chandigarh Bench-II, titled Praveen Kumar Garg v. Laxmi Pipes Ltd., which stood admitted on 28.05.2024, and wherein Mr. Gautam Singhal was appointed as the Resolution Professional.

# 6. The pendency and admission of the Corporate Insolvency Resolution Process of the Corporate Debtor before the Hon’ble NCLT, Chandigarh Bench crystallised exclusive territorial and subject-matter jurisdiction in terms of Section 60(2) of the Insolvency and Bankruptcy Code, 2016. Consequently, the initiation and continuation of the proceedings under Section 95 IBC before the Hon’ble NCLT, New Delhi, Bench-II are without jurisdiction, and void ab initio, thus the said proceedings are liable to be transferred to the Hon’ble NCLT, Chandigarh Bench in accordance with law.

# 7. Further, by order dated 28.05.2024, the Hon’ble NCLT, New Delhi, Bench-II, admitted CP (IB) No. 419/ND/2023 under Section 95 IBC, appointed Mr. Gautam Singhal (IBBI/IPA-001/IP-P01437/2018-2019/12240) as the Resolution Professional, and thereby triggered an interim moratorium under Section 96 IBC, resulting into an initiation of parallel insolvency proceedings arising out of the same debt and transaction. Being aggrieved the Appellant filed Transfer Application No. T.A. (IBC)-50 (PB) of 2024 on 08.07.2024, before the Hon’ble NCLT, Principal Bench, seeking transfer of CP (IB) No. 419/ND/2023 to the Hon’ble NCLT, Chandigarh Bench-II, under Section 60(1) and (2) IBC read with Rule 16(d) of the NCLT Rules, 2016, to cure the inherent jurisdictional defect. The said Transfer Application specifically raised a threshold and incurable objection of jurisdiction, contending that proceedings under Section 95 IBC against a Personal Guarantor cannot be maintained before NCLT New Delhi particularly when the CIRP of the Corporate Debtor is pending before NCLT Chandigarh, which alone has exclusive territorial and subject-matter jurisdiction under Section 60(2) of the Code. Thereafter, on 05.12.2025, the Ld. Principal Bench dismissed T.A. (IBC)-50 (PB) of 2024 titled as “Kamlesh Rani Singla Vs. Praveen Kumar Garg” by way of the Impugned Order, without granting the Appellant an effective opportunity of hearing on the jurisdictional issue, and refused to order transfer of CP (IB) No. 419/ND/2023, NCLT-II, to the Hon’ble NCLT, Chandigarh Bench-II.

# 8. While dismissing the Transfer Application of the Appellant, the Ld. Adjudicating Authority has erroneously placed reliance upon the judgment dated 16.10.2025 passed by the Hon’ble High Court of Gujarat in R/Special Civil Application No. 11679 of 2024, titled Arcelor Mittal Nippon Steel India Limited v. National Company Law Tribunal & Ors. [(2025) ibclaw.in 4821 HC], and has, on that premise, misconstrued the scope of Rule 16(d) of the National Company Law Tribunal Rules, 2016 as being confined only to intra-territorial transfers, thereby completely disregarding and rendering otiose the overriding, mandatory and special jurisdictional command contained in Section 60(2) of the Insolvency and Bankruptcy Code, 2016, which obligates that all insolvency proceedings in respect of a Corporate Debtor and its corporate guarantor must be heard by the same Ld. Adjudicating Authority (Bench) having jurisdiction over the Corporate Debtor. Section 60(2) of the Insolvency and Bankruptcy Code, 2016, in clear and mandatory terms, provides that where a CIRP or liquidation proceeding of a Corporate Debtor is pending before a particular Bench of the NCLT, any application relating to the insolvency resolution or bankruptcy of the Personal Guarantor of such Corporate Debtor shall be filed before the same Bench. The legislative intent is to ensure consolidation of proceedings, judicial consistency, and avoidance of conflicting decisions. In view of the aforesaid overriding statutory mandate under Section 60(2) of the Insolvency and Bankruptcy Code, 2016, the Hon’ble NCLT, New Delhi, lacks both territorial jurisdiction as well as inherent jurisdiction to entertain or proceed with the Section 95 application against the Appellant, and any continuation of such proceedings would be void ab initio, coram non judice, without jurisdiction, and wholly unsustainable in law.

# 9. The issue raised in the present appeal is covered by the judgment of this Hon’ble Appellate Tribunal in Company Appeal (AT) (Insolvency) No. 58 of 2023, Ankit Miglani v. State Bank of India [(2023) ibclaw.in 292 NCLAT], decided on 19.04.2023, wherein this Hon’ble Tribunal, after an exhaustive consideration of the scheme and scope of Section 60(1), (2) and (3) of the Insolvency and Bankruptcy Code, 2016, has categorically held that Section 60(2) of the Code is mandatory in nature and admits of no discretion. It has been unequivocally laid down that where a Corporate Insolvency Resolution Process of the Corporate Debtor is pending before a particular Bench of the National Company Law Tribunal, any application relating to the insolvency resolution or bankruptcy of the Personal Guarantor of such Corporate Debtor must necessarily be instituted before the same Ld. Adjudicating Authority (Bench), and not before any other Bench. The Hon’ble Appellate Tribunal has further clarified that the legislative intent behind Section 60(2) IBC is to ensure consolidation of proceedings, judicial consistency, and avoidance of parallel or conflicting decisions by different Benches of the NCLT, and that assumption of jurisdiction by any other Bench, in the absence of a pending CIRP before it, constitutes a patent lack of territorial jurisdiction. Applying the said binding ratio, once the CIRP of the Corporate Debtor is admittedly pending before the Hon’ble NCLT, Chandigarh Bench-II, the initiation and continuation of proceedings under Section 95 IBC against the Appellant before the Hon’ble NCLT, Bench-II, New Delhi are wholly without jurisdiction, non-est in law, and is liable to be transferred. The Impugned Order, therefore, runs directly contrary to the settled law laid down by this Hon’ble Appellate Tribunal and warrants interference on this ground alone.

# 10. In the aforesaid circumstances, the impugned order dated 05.12.2025 is illegal, perverse, and unsustainable in law. Consequently, C.P. (IB) No. 419/ND/2023 pending before the Hon’ble NCLT, New Delhi Bench-II is liable to be transferred to the Hon’ble NCLT, Chandigarh Bench-II, being the sole jurisdictional Adjudicating Authority, under Section 60(2) of the Insolvency and Bankruptcy Code, 2016. The present Appeal is, therefore, being preferred. The present Appeal, therefore, deserves to be allowed, the Impugned Order set aside, and CP (IB) No. 419/ND/2023 be transferred to the Hon’ble NCLT, Chandigarh Bench, being the sole competent Ld. Adjudicating Authority (Bench), in the interest of justice.

Reliefs Sought

# 11. In view of the facts and grounds stated above, it is most respectfully prayed that this Hon’ble Appellate Tribunal may be pleased to:

(a) Set aside the Impugned Order dated 05.12.2025 passed by the NCLT, New Delhi Single Principal Bench in TA(IBC) – 50(PB) / 2024.

(b) Allow TA(IBC) – 50(PB) / 2024 titled as “Kamlesh Rani Singla Vs. Praveen Kumar Garg” and transfer CP(IB) No. 419/ND/2023, titled as Praveen Kumar Garg Proprietor of M/S GSV Products Vs. Kamlesh Rani Singla from NCLT New Delhi Bench II to NCLT Chandigarh Bench-II under Section 60(2) IBC read with Rule 16(d) NCLT Rules.

(c) Quash and set aside all proceedings undertaken before the Hon’ble National Company Law Tribunal, New Delhi in CP (IB) No. 419/ND/2023 pursuant to and subsequent to the admission order dated 28.05.2024, and direct that the said proceedings shall remain in abeyance and stand transferred to the Hon’ble National Company Law Tribunal, Chandigarh Bench-II, being the competent and jurisdictional Adjudicating Authority under Section 60(2) of the Insolvency and Bankruptcy Code, 2016.

(d) Pass such other order(s) as this Hon’ble Tribunal may deem fit and proper in the interest of justice.

Issues for consideration:

• Whether the Hon’ble National Company Law Tribunal, New Delhi, Bench-II, could exercise jurisdiction over proceedings initiated under Section 95 of the Insolvency and Bankruptcy Code, 2016 against a Personal Guarantor, when the Corporate Insolvency Resolution Process of the Corporate Debtor is admittedly pending prior in time before the Hon’ble NCLT, Chandigarh Bench-II?

• Whether the dismissal of T.A. (IBC) No. 50 (PB) of 2024 by the Ld. Principal Bench, New Delhi, without affording the Appellant an effective and meaningful opportunity of hearing on the foundational objection of lack of jurisdiction under Section 60(2) of the Insolvency and Bankruptcy Code, 2016, amounts to a violation of the principles of natural justice which is basic essence of adjudication, thereby vitiating the impugned order and rendering it legally unsustainable?

• Whether the judgment of the Hon’ble Gujarat High Court dated 16.10.2025 passed in R/SCA No.11679 of 2024, rendered in the context of administrative transfers, is applicable to, or can govern, judicial transfer applications seeking correction of an inherent and incurable statutory jurisdictional defect under Section 60(2) of the Insolvency and Bankruptcy Code, 2016?

Appraisal

# 12. The Ld. Adjudicating Authority has dismissed the transfer application, solely relying on the order dated 16.10.2025 passed by the Hon’ble High Court of Gujarat in R/Special Civil Application No. 11679 of 2024. The relevant portion of that order is extracted below:

• “[16] On a perusal of Rule 16(d) of the NCLT Rules, 2016, it becomes clear that the Rule defines the powers and functions of the President, Registrar, and Secretary. Under this provision, the President has the authority to transfer cases from one Bench to another within the same Tribunal when circumstances so require. However, the Rule does not confer any power to transfer a case beyond the territorial jurisdiction of a particular Bench. In other words, the President’s authority to transfer matters is confined to Benches falling within the same territorial limits.

In the present case, the NCLT, New Delhi, while acting on the administrative side, has committed a serious error by transferring the cases from the NCLT, Ahmedabad, to the NCLT, Mumbai. The President of the NCLT has no administrative power to alter or extend the territorial jurisdiction of any Bench. Such an administrative decision directly affecting pending judicial proceedings is, therefore, subject to judicial review. Accordingly, the orders dated 6th June 2024 and 10th February 2025 passed by the NCLT, New Delhi, on the administrative side, are without any legal authority and are liable to be quashed and set aside.

Moreover, since the issue of transfer of these petitions was already pending before the NCLT, New Delhi, on the judicial side, the exercise of administrative powers in this manner has rendered those proceedings ineffective, which further fortifies the impropriety of the orders.

I answer the question No.(ii) accordingly.”

# 13. The primary issue for our consideration before us is as to whether NCLT, New Delhi, Bench-II, could exercise jurisdiction over proceedings initiated under Section 95 of the Insolvency and Bankruptcy Code, 2016, against a Personal Guarantor, when the CIR Proceedings of the Corporate Debtor is already pending before the NCLT, Chandigarh Bench-II, and whether it is against the provisions under Section 60(2) of the Code? Further whether Rule 16(d) of the NCLT Rules, 2016, restricts the power and functions of the President to allow such transfer applications in such situations as is in this case.

# 14. Before proceeding further, it will be useful to extract the provisions of Section 60(2) of the Insolvency and Bankruptcy Code noted as follows:

“Section 60: Adjudicating Authority for corporate persons

(1) The Adjudicating Authority, in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof shall be the National Company Law Tribunal having territorial jurisdiction over the place where the registered office of the corporate persons located.

(2) Without prejudice to sub-section (1) and notwithstanding anything to the contrary contained in this Code, where a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before a National Company Law Tribunal, an application relating to the insolvency resolution or liquidation or bankruptcy of a corporate guarantor or personal guarantor, as the case may be, of such corporate debtor shall be filed before such National Company Law Tribunal.

(3) An insolvency resolution process or liquidation or bankruptcy proceeding of a corporate guarantor or personal guarantor, as the case may be, of the corporate debtor pending in any court or tribunal shall stand transferred to the Adjudicating Authority dealing with insolvency resolution process or liquidation proceeding of such corporate debtor”

# 15. We note that Section 60(2) of the Insolvency and Bankruptcy Code, 2016, clearly provides that where a CIRP or liquidation proceeding of a Corporate Debtor is pending before a particular Bench of the NCLT, any application relating to the insolvency resolution or bankruptcy of the Personal Guarantor of such Corporate Debtor shall be filed before the same Bench. Apparently, the intent is to ensure consolidation of proceedings, judicial consistency, and avoidance of conflicting decisions. The provisions of Section 60(2), because of use of non-obstinate clause, will have an overriding effect under the circumstances to Section 60(1), as far as it relates to defining of territorial jurisdiction for cognizance of proceeding under the Code. Thus, this is an overriding statutory mandate under Section 60(2) of the Insolvency and Bankruptcy Code, 2016. Therefore, NCLT, New Delhi, lacks both territorial jurisdiction as well as inherent jurisdiction to entertain or proceed with the Section 95 application against the Appellant, and any continuation of such proceedings would be void ab initio and without jurisdiction.

# 16. It was also brought to our notice that this Appellate Tribunal in Company Appeal (AT) (Insolvency) No. 58 of 2023, Ankit Miglani v. State Bank of India [(2023) ibclaw.in 292 NCLAT], after an exhaustive consideration of the scheme and scope of Section 60(1), (2) and (3) of the Insolvency and Bankruptcy Code, 2016, decided on 19.04.2023, that Section 60(2) of the Code is mandatory in nature and admits of no discretion. It was held that:

• The Scheme of the Code as per Section 60 is that Adjudicating Authority, in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors in the NCLT having territorial jurisdiction over the place where the registered office of a corporate person is located. The Corporate Person in the present case is Uttam Galva Metallics Limited, whose registered office admittedly is in the State of Haryana. Sub-section (2) of Section 60 contains an addition to Section 60(1), which provides that where a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before a National Company Law Tribunal, an application relating to the insolvency resolution process of a corporate guarantor or personal guarantor shall be filed before such National Company Law Tribunal.

# 17. We further note that, this Appellate Tribunal had also considered the Scheme of Section 60, sub-section (2) in Company Appeal (AT) (Insolvency) No.60 of 2022 – State Bank of India, Stressed Asset Management Branch vs. Mahendra Kumar Jajodia, Personal Guarantor to Corporate Debtor [(2022) ibclaw.in 89 NCLAT], wherein, the Ld. Adjudicating Authority had held that no CIRP or liquidation proceedings of the Corporate Debtor being pending, the Application filed under Section 95 was rejected. In the above context, this Appellate Tribunal examined the statutory Scheme of Section 60 and in paragraphs 7 to 10, following was held:

• “7. Sub-Section 1 of Section 60 provides that Adjudicating Authority for the corporate persons including corporate debtors and personal guarantors shall be the NCLT. The Sub-Section 2 of Section 60 requires that where a CIRP or Liquidation Process of the Corporate Debtor is pending before ‘a’ National Company Law Tribunal the application relating to CIRP of the Corporate Guarantor or Personal Guarantor as the case may be of such Corporate Debtor shall be filed before ‘such’ National Company Law Tribunal. The purpose and object of the sub-section 2 of Section 60 of the Code is that when proceedings are pending in ‘a’ National Company Law Tribunal, any proceeding against Corporate Guarantor should also be filed before ‘such’ National Company Law Tribunal. The idea is that both proceedings be entertained by one and the same NCLT. The sub-section 2 of Section 60 does not in any way prohibit filing of proceedings under Section 95 of the Code even if no proceeding are pending before NCLT.

• 8. The use of words ‘a’ and ‘such’ before National Company Law Tribunal clearly indicates that Section 60(2) was applicable only when a CIRP or Liquidation Proceeding of a Corporate Debtor is pending before NCLT. The object is that when a CIRP or Liquidation Proceeding of a Corporate Debtor is pending before ‘a’ NCLT the application relating to Insolvency Process of a Corporate Guarantor or Personal Guarantor should be filed before the same NCLT. This was to avoid two different NCLT to take up CIRP of Corporate Guarantor. Section 60(2) is applicable only when CIRP or Liquidation Proceeding of a Corporate Debtor is pending, when CIRP or Liquidation Proceeding are not pending with regard to the Corporate Debtor there is no applicability of Section 60(2).

• 9. Section 60(2) begins with expression ‘Without prejudice to sub-section (1)’ thus provision of Section 60(2) are without prejudice to Section 60(1) and are supplemental to sub-section (1) of Section 60.

• 10. Sub-Section 1 of Section 60 provides that Adjudicating Authority in relation to Insolvency or Liquidation for Corporate Debtor including Corporate Guarantor or Personal Guarantor shall be the NCLT having territorial jurisdiction over the place where the Registered Office of the Corporate Person is located. The substantive provision for an Adjudicating Authority is Section 60, sub-Section (1), when a particular case is not covered under Section 60(2) the Application as referred to in sub-section (1) of Section 60 can be very well filed in the NCLT having territorial jurisdiction over the place where the Registered Office of corporate Person is located.”

# 18. As noted by this Appellate Tribunal in above noted judgments, we find that it has been unequivocally laid down that where a Corporate Insolvency Resolution Process of the Corporate Debtor is pending before a particular Bench of the National Company Law Tribunal, any application relating to the insolvency resolution or bankruptcy of the Personal Guarantor of such Corporate Debtor must necessarily be instituted before the very same Ld. Adjudicating Authority (Bench), and not before any other Bench. It ensures consolidation of proceedings, judicial consistency, and avoidance of parallel or conflicting decisions by different Benches of the NCLT. Furthermore, we agree with the arguments that assumption of jurisdiction by any other Bench, in the absence of a pending CIRP before it, constitutes a lack of territorial jurisdiction. We thus find that by applying the said ratio, once the CIRP of the Corporate Debtor is admittedly pending before the Hon’ble NCLT, Chandigarh Bench-II, the initiation and continuation of proceedings under Section 95 IBC against the Appellant before the Hon’ble NCLT, Bench-II, New Delhi are wholly without jurisdiction, non-est in law, and liable to be set aside.

# 19. The Impugned Order, therefore, runs directly contrary to the settled law laid down by this Appellate Tribunal and warrants our interference on this ground alone. Thus, in view of the foregoing facts and circumstances, the statutory mandate contained in Section 60(2) read with Section 60(5) of the Insolvency and Bankruptcy Code, 2016, it is manifest that the assumption and continuation of jurisdiction by the Hon’ble NCLT, New Delhi in CP (IB) No. 419/ND/2023 is wholly without authority of law and vitiated by a jurisdictional error.

# 20. The position of law as per Insolvency and Bankruptcy Code 2016 and the related NCLT Rules 2016 is recapitulated as below for ready reference:

• Section 60 (2): Without prejudice to sub-section (1) and notwithstanding anything to the contrary contained in this Code, where a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before a National Company Law Tribunal, an application relating to the insolvency resolution or liquidation or bankruptcy of a corporate guarantor or personal guarantor, as the case may be, of such corporate debtor shall be filed before such National Company Law Tribunal.

• Rule 16 (d) in addition to the general powers provided in the Act and in these Rules, the President shall exercise the following powers, namely: – transfer any case from one Bench to other Bench when the circumstances so warrant”

• “Bench” per Rule 2(7) of NCLT Rules 2016: “bench means a bench of the tribunal constituted under Section 419 of the Act and includes circuit benches constituted by the President with prior approval of the Central Government to sit at such other geographical locations as may be necessary, having regard to requirements.”

# 21. The perusal of the above legal position makes things very clear. Rule 16(d) of the NCLT Rules 2016, administratively equips the President NCLT with sufficient power to transfer any case from one bench to the other bench. Further, the power of President NCLT is not restricted nor clouded to any territorial location. Rather the President NCLT is empowered to transfer a case as per the criteria laid down in section 60(2) of the Code, which empowers to transfer proceedings against personal guarantor from some other bench to where the proceedings against the Corporate Debtor were going on. We note that it will create anomalous situations by a narrow interpretation that Rule 16(d) restricts it to the same territorial jurisdiction as has happened in this particular case.

# 22. We thus observe that a combined reading of Section 60 of the Code, Rule 16 (d) and Rule 2(7) of NCLT Rules 2016 indicates that the President NCLT is empowered to transfer any case from one bench to the other bench having regard to requirements. It is all the more important per Section 60 when the CIR proceeding against the Corporate Debtor is going on in one bench, the President is very well empowered under Section 60(2) of the Code to transfer proceedings against personal guarantor from some other bench to where the proceedings against the corporate debtor were going on.

# 23. We note that the insolvency proceedings against the Corporate Debtor are going on in the NCLT bench in Chandigarh and the insolvency proceedings against the personal guarantor have been initiated in another bench in another territorial location at New Delhi. Even the transfer application has been dismissed by the President NCLT, ignoring the provisions in Section 60(2) of the Code but on a very narrow interpretation of Rule 16(d) that the proceedings cannot be transferred from one territorial jurisdiction to another territorial jurisdiction.

# 24. Thus we find that the Ld. Adjudicating Authority has misconstrued the scope of Rule 16(d) of the National Company Law Tribunal Rules, 2016 as being confined only to intra-territorial transfers, thereby completely disregarding and rendering otiose the jurisdictional command contained in Section 60(2) of the Insolvency and Bankruptcy Code, 2016, though being overriding provision which obligates that all insolvency proceedings in respect of a Corporate Debtor and its corporate guarantor must be heard by the same Ld. Adjudicating Authority (Bench) having jurisdiction over the Corporate Debtor. Section 60(2) of the Insolvency and Bankruptcy Code, 2016, in clear and mandatory terms, provides that where a CIRP or liquidation proceeding of a Corporate Debtor is pending before a particular Bench of the NCLT, any application relating to the insolvency resolution or bankruptcy of the Personal Guarantor of such Corporate Debtor shall be filed before the same Bench. In view of the aforesaid overriding statutory mandate under Section 60(2) of the Insolvency and Bankruptcy Code, 2016, the Hon’ble NCLT, New Delhi, lacks both territorial jurisdiction as well as inherent jurisdiction to entertain or proceed with the Section 95 application against the Appellant, and any continuation of such proceedings would be void ab initio, coram non judice, without jurisdiction, and wholly unsustainable in law.

# 25. We also note that the Transfer Application specifically raised a threshold and objection of jurisdiction, contending that proceedings under Section 95 IBC against a Personal Guarantor cannot be maintained before NCLT New Delhi when the CIRP of the Corporate Debtor is pending before NCLT Chandigarh, which alone has exclusive territorial and subject-matter jurisdiction under Section 60(2) of the Code. In this case we find that the proceedings against the Corporate Debtor were going on in NCLT Chandigarh in one of the benches and simultaneously proceedings against the personal guarantor have been initiated in NCLT Delhi in another bench. It would have been appropriate that this application should have been dismissed as non-maintainable at the stage of the admission itself and the applicant should have been advised to file it before the appropriate bench, that is in Chandigarh. In any case when the transfer application was filed before the President, the President while relying on the judgement of Hon’ble Gujarat High Court has not been allowed the transfer, which is against the provisions of the Code and a very narrow interpretation of Rule 16 (d) of the NCLT Rules.

Orders

# 26. Therefore, we set aside the order of the President NCLT in TA(IBC)-50(PB)/2024 and quash the proceedings in CP(IB) No. 419/ND/2023. Respondents are provided liberty to file proceedings as per law as an Operational Creditor under Section 95 before NCLT with appropriate jurisdiction in the matter.

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