Kamlesh Rani Singla vs Praveen Kumar Garg Proprietor M/S. Gsv ...

(Arising out of the Impugned Order dated 05.12.2025 passed by the 'Adjudicating Authority' (National Company Law Tribunal, New Delhi Single Principal Bench in TA(IBC)-50(PB)/2024)

IN THE MATTER OF: Kamlesh Rani Singla W/o Sh. Pawan Singla R/o 28, 3rd Floor, North Avenue Road, Punjabi Bagh West, West Delhi, Delhi - 110026 ...Appellant

Versus

1. Praveen Kumar Garg Proprietor of M/s GSV Products Legal Admin & Regd. Office, WZ-14D, Manohar Park, New Delhi-110026 ...Respondent No.1

2. Mr. Gautam Singhal (Resolution Professional) Duly appointed in (IB)-419/ND/2023) IBBI Registration No.: IBBI/IPA-001/IP-P01437/2018-19/12240 ...Respondent No.2

Present: For Appellant : Dr. Pankaj Garg and Mr. Yaksh Garg, Advocates.

For Respondent : Mr. Rajat Chaudhary, Advocate for R-2

JUDGMENT

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)] 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.

Company Appeal (AT) (Insolvency) No. 275 of 2026 2 of 20

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

Company Appeal (AT) (Insolvency) No. 275 of 2026 3 of 20 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

Company Appeal (AT) (Insolvency) No. 275 of 2026 4 of 20 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., 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,

Company Appeal (AT) (Insolvency) No. 275 of 2026 5 of 20 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, 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

Company Appeal (AT) (Insolvency) No. 275 of 2026 6 of 20 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

Company Appeal (AT) (Insolvency) No. 275 of 2026 7 of 20 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

Company Appeal (AT) (Insolvency) No. 275 of 2026 8 of 20 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:

o 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?

o 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?

o 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?

Company Appeal (AT) (Insolvency) No. 275 of 2026 9 of 20 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."

Company Appeal (AT) (Insolvency) No. 275 of 2026 10 of 20

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

Company Appeal (AT) (Insolvency) No. 275 of 2026 11 of 20 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, 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:

Company Appeal (AT) (Insolvency) No. 275 of 2026 12 of 20 XXX

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.

XXX

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,

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

Company Appeal (AT) (Insolvency) No. 275 of 2026 13 of 20 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.

Company Appeal (AT) (Insolvency) No. 275 of 2026 14 of 20

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

Company Appeal (AT) (Insolvency) No. 275 of 2026 15 of 20 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:

o 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.

o Rule 16 (d) in addition to the general powers provided in

the Act and in these Rules, the President shall exercise the

Company Appeal (AT) (Insolvency) No. 275 of 2026 16 of 20 following powers, namely: - transfer any case from one

Bench to other Bench when the circumstances so warrant"

o "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

Company Appeal (AT) (Insolvency) No. 275 of 2026 17 of 20 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

Company Appeal (AT) (Insolvency) No. 275 of 2026 18 of 20 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.

Company Appeal (AT) (Insolvency) No. 275 of 2026 19 of 20 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.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Arun Baroka] Member (Technical)

[Indevar Pandey] Member (Technical) New Delhi.

September 09, 2026.

pawan

Company Appeal (AT) (Insolvency) No. 275 of 2026 20 of 20