When actions are already pending against same personal guarantor, a subsequent application u/s 95 IBC is barred: NCLAT [Read Order]

The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) has ruled that if one Financial Creditor has already filed an application under Section 95 of the Insolvency and Bankruptcy Code (IBC), Section 96 of the Code prohibits another creditor from filing an application under the same provision against the same Personal Guarantor.

In order to start the Corporate Insolvency Resolution Process (CIRP) against the Respondent, the Personal Guarantor, the Appellant, Indian Bank, filed an application before the NCLT, Chennai Bench, under Section 95 of the Insolvency and Bankruptcy Code, 2016. On January 6, 2025, the NCLT rejected the application as infructuous, allowing the applicant to reapply at a later time. To contest the aforementioned order, the appellant went to the NCLAT.

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The bench, which included Jatindranath Swain, a technical member, and Justice Sharad Kumar Sharma, a judicial member, observed that the same matter had previously been decided in Comp App (AT) (CH) (Ins) No.121/2025, Indian Bank, SAMB, Chennai vs. T. Prabakar. As a result, the appellant's application under Section 95(1) of the IBC against another personal guarantor was denied because IDBI Trusteeship Services Limited, another Financial Creditor, had already brought Section 95 proceedings against the same personal guarantor. Because of the bar under Section 96, no further application under Section 95 may be considered against the Personal Guarantor.

Therefore, the NCLAT denied the appeal, concluding that the NCLT should expedite the current processes instead of considering several applications under Section 95.

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