Ms. Manju Sirohi vs Assets Care & Reconstruction ...

Comp. App. (AT) (Ins) No. 1772 of 2026 & I.A. No. 6703 of 2026 Arising out of Impugned Order dated 12.09.2022 passed by National Company Law Tribunal, New Delhi Bench (Court No. IV), at New Delhi in C.A. No.485/2019 IN THE MATTER OF: Ms. Manju Sirohi W/o Sh. Ashok Kumar Sirohi R/O E-13, Ground Floor, Sector-30, Noida, Uttar Pradesh-201301 E-mail: sirohimanju353@gmail.com ....Appellant

VERSUS

1. Assets Care & Reconstruction Enterprise Ltd. Registered office at: 2 Floor, Mohan Dev Building, 13, Tolstoy Marg, New Delhi-110001 And Branch office at: Unit No.: 502, C Wing, One BKC, Radius Developers, Plot N: C 66, G Block, Bandra Kurla Complex, Mumbai, Maharashtra- 400051 E-mail: acre.arc@acreindia.in ....Respondent No.1

2. Mr. Anup Kumar Bankruptcy Trustee of Ms. Manju Sirohi Personal Guarantor of M/s Saha Infratech Pvt Ltd IBBI Reg No. IBBI/IPA-002/IP-N00333/2017- 2018/10911 734, Lawyers Chamber Block, Western Wing, Tis Hazari Court, Delhi-110054 E-mail: irp.acre@gmail.com ....Respondent No.2

Present

Page 1 of 13 For Appellant: Mr. Sulaiman Mohd. Khan, Ms. Taibh Khan, Mr. Yashvardhan Mittal & Mr. Ranjeet Singh, Advocates. For Respondents: Mr. Amit Prakash, Advocate for R-2

With

Comp. App. (AT) (Ins) No. 1773 of 2026 & I.A. No. 6707 of 2026

(Arising out of Impugned Order dated 20.08.2026 passed in RA- 73/ND/2026 in CP(IB)-80/ND/2023 by the Hon'ble National Company Law Tribunal, New Delhi) IN THE MATTER OF: Ms. Manju Sirohi W/o Sh. Ashok Kumar Sirohi R/O E-13, Ground Floor, Sector-30, Noida, Uttar Pradesh-201301 E-mail: sirohimanju353@gmail.com ....Appellant

VERSUS

1. Assets Care & Reconstruction Enterprise Ltd. Registered office at: 2 Floor, Mohan Dev Building, 13, Tolstoy Marg, New Delhi-110001 And Branch office at: Unit No.: 502, C Wing, One BKC, Radius Developers, Plot N: C 66, G Block, Bandra Kurla Complex, Mumbai, Maharashtra- 400051 E-mail: acre.arc@acreindia.in ....Respondent No.1

2. Mr. Anup Kumar Bankruptcy Trustee of Ms. Manju Sirohi Personal Guarantor of M/s Saha Infratech Pvt Ltd IBBI Reg No. IBBI/IPA-002/IP-N00333/2017- 2018/10911 734, Lawyers Chamber Block, Western Wing, Tis Hazari Court, Delhi-110054 E-mail: irp.acre@gmail.com ....Respondent No.2 Page 2 of 13 Present For Appellant: Mr. Sulaiman Mohd. Khan, Ms. Taibh Khan, Mr. Yashvardhan Mittal & Mr. Ranjeet Singh, Advocates.

For Respondents: Mr. Amit Prakash, Advocate for R-2

JUDGEMENT

( 07.10.2026)

NARESH SALECHA, MEMBER (TECHNICAL)

1. There are two appeals before us i.e. Company Appeal (AT) (INS) No. 1772

of 2026 and Company Appeal (AT) (INS) No. 1773 of 2026 filed by the

Appellant, Manju Sirohi.

Company Appeal (AT) (INS) No. 1772 of 2026

2. The appeal is filed by the Appellant i.e., Manju Sirohi who is a Personal

Guarantor of M/s Saha Infratech Private Limited under Section 61 of the

Insolvency and Bankruptcy Code, 2016, ("Code") arising out of Impugned Order

dated 03.08.2026 passed in IA/ND/4604/2025 in CP(IB)-80/ND/2023 by the

Hon'ble National Company Law Tribunal, New Delhi ("Adjudicating

Authority").

Assets Care & Reconstruction Enterprise Ltd., who is the Financial

Creditor, acting in its capacity as trustee of ACRE-100-TRUST, is the

Respondent No.1 herein.

Page 3 of 13 Mr. Anup Kumar, who is the Bankruptcy Trustee of the Appellant is the

Respondent No.2 herein.

Company Appeal (AT) (INS) No. 1773 of 2026

3. The appeal is filed by the Appellant i.e., Manju Sirohi who is a Personal

Guarantor of M/s Saha Infratech Private Limited under Section 61 of the

Insolvency and Bankruptcy Code, 2016, ("Code") arising out of Impugned Order

dated 20.08.2026 passed by the Hon'ble National Company Law Tribunal

("Adjudicating Authority") in CP(IB)-80/ND/2023, whereby RA-73/ND/2026

seeking recall of the Order dated 03.08.2026 being being ex-parte Order was

dismissed.

Assets Care & Reconstruction Enterprise Ltd., who is the Financial Creditor,

acting in its capacity as trustee of ACRE-100-TRUST, is the Respondent No.1

herein.

Mr. Anup Kumar, who is the Bankruptcy Trustee of the Appellant is the

Respondent No.2 herein.

Common Pleadings of the Appellant

4. The Appellant submitted that Respondent No. 1 had filed an application

under Section 95(1) of the Code, to initiate the insolvency process against her on

account of the failure of M/s Saha Infratech Pvt. Ltd. (Corporate Debtor) to repay

the debt. The Appellant stated that vide order dated 10.04.2023, the Adjudicating

Page 4 of 13 Authority appointed Mr. Anup Kumar as the Resolution Professional in CP(IB)-

80/ND/2023. The Appellant contended that Respondent No. 1 thereafter filed IA-

5276/2024 under Section 123 of the Code seeking initiation of the bankruptcy

process against her, and that due to her non-appearance, the Adjudicating

Authority initiated ex-parte proceedings by order dated 21.02.2025.

5. The Appellant submitted that on 03.03.2025 and again on 16.03.2025 she

sold her personal jewellery in order to sustain herself in Delhi NCR, with the sale

proceeds being credited to her personal bank account, and that on 11.03.2025 she

received funds transferred from her mother-in-law's bank account pursuant to its

closure. The Appellant contended that on 14.05.2025 the Adjudicating Authority

reserved orders in IA-5276/2024, and that on 21.05.2025 the Adjudicating

Authority declared her bankrupt under Section 126 of the Code and appointed

Respondent No. 2 as the Bankruptcy Trustee under Section 125 of the Code.

6. The Appellant submitted that on 11.09.2025, Respondent No. 2 filed IA-

4604/ND/2025 under Regulation 12 of the relevant IBBI Regulations read with

Section 186(D) of the Code, seeking, inter alia, directions to the Appellant to

submit her complete financial position, to return a sum of Rs. 19,17,500/- forming

part of the bankruptcy estate, to furnish details of after-acquired property, and to

extend co-operation in the bankruptcy process.

7. The Appellant stated that a complete transaction summary of her Union

Bank of India account (No. 398502010053816) reveals deposits totalling Rs.

18,92,214.00 comprising Rs. 5,66,966.00 transferred from her mother-in-law's

Page 5 of 13 account on 11.03.2025 and Rs. 13,25,248.00 realised from the sale of gold

jewellery and related items on 24.03.2025, against withdrawals totalling Rs.

19,19,500.00 made between 16.06.2025 and 24.07.2025, primarily by self-

withdrawal and ATM.

8. The Appellant contended that her counsel, who was recently engaged,

appeared on 03.08.2026 through video conferencing when the Adjudicating

Authority disposed of IA-4604/ND/2025 and passed an ex-parte order directing

her to pay back Rs. 19,17,500/- to Respondent No. 2. The Appellant submitted

that although her counsel was present when the matter was called, an unstable

internet connection prevented necessary submissions, resulting in the ex-parte

order.

9. The Appellant submitted that being aggrieved by the said ex-parte order,

she preferred RA-73/ND/2026 under Rule 11 of the NCLT Rules, 2016 seeking

its recall. The Appellant stated that on 20.08.2026, the recall application was

heard and dismissed by the Adjudicating Authority on the ground that IA-

4604/ND/2025 had been allowed and disposed of on merits and that a recall

application was not the appropriate remedy, even though the order dated

03.08.2026 itself recorded that the application was allowed due to the absence of

any denial.

10. The Appellant submitted that the Adjudicating Authority grossly erred in

dismissing the recall application and failed to appreciate that the order dated

03.08.2026 was not passed on merits and was made without affording her an

Page 6 of 13 opportunity of hearing. The Appellant stated that she is a senior citizen residing

in Delhi NCR with no source of income, that the sale of her personal jewellery

was a last resort to sustain herself, and that she was unaware of the moratorium

at the time of the withdrawals.

11. The Appellant contended that her personal jewellery constitutes an

excluded asset under Section 155(2) of the Code, and that the amounts withdrawn

from her savings account represented the sale proceeds of such jewellery together

with the sum transferred from her mother-in-law's account, both of which are

excluded assets under Section 79(14) of the Code.

12. Concluding arguments, the Appellant requested this Appellate Tribunal to

set aside the Impugned Orders and allow the both appeals.

13. Per contra, the Respondent No.2 (Bankruptcy trustee), the contesting

Respondent , denied all the averments made by the Appellant as misleading and

baseless.

14. The Respondent No. 2 stated that in the captioned matter the Personal

Insolvency Resolution Process was initiated on 18.01.2024 and, upon non-

submission of a repayment plan, the Adjudicating Authority passed an order on

02.07.2024 under Section 114 of the Code, directing the financial creditor to file

an application against the personal guarantor/Appellant. The Respondent No. 2

contended that the financial creditor thereafter filed an application under Section

123 of the Code, and vide order dated 21.05.2025 the Adjudicating Authority

Page 7 of 13 initiated the bankruptcy process against the Appellant and appointed the

answering Respondent as the Bankruptcy Trustee to conduct the proceedings in

accordance with law.

15. The Respondent No. 2 submitted that pursuant to the order dated

21.05.2025, a public announcement was made on 30.05.2025 inviting creditor

claims by 06.06.2025, and simultaneous intimation of initiation of the bankruptcy

proceedings.

16. The Respondent No. 2 stated that pursuant to the public announcement

claims were received from two financial creditors and admitted as follows: M/s

Assets Care & Reconstruction Enterprises Ltd. claimed Rs. 426,19,59,899/-, of

which Rs. 55,06,45,056.52/- was admitted and Rs. 371,13,14,842.48/- was

admitted as contingent; M/s IDBI Trusteeship Services Ltd. claimed Rs.

544,33,62,699/- which was admitted entirely as contingent, resulting in a total

claim of Rs. 970,53,22,598/-, of which Rs. 55,06,45,056.52/- was admitted and

Rs. 915,46,77,541.48/- was admitted as contingent.

17. The Respondent No. 2 contended that pursuant to Section 133 of the Code

the first meeting of creditors was convened on 01.07.2025, in which the Appellant

through her representative participated and assured the Bankruptcy Trustee that

the financial statement of the Bankrupt would be submitted as called for in the

intimation letter dated 30.05.2025. The Respondent No. 2 submitted that despite

the assurance, the Appellant failed to provide the financial statement as called for,

whereupon another intimation was sent on 18.07.2025 seeking relevant

Page 8 of 13 information; in response the Appellant furnished details of bank accounts and

other information.

18. The Respondent No. 2 stated that upon receiving the information, the

Bankruptcy Trustee collected the bank account statements and instructed the

banks to mark debit freeze on all accounts till further instructions. Upon perusal

of the statements, it was found that the Appellant had withdrawn a total of Rs.

19,17,500/- between 16.06.2025 and 24.07.2025, the details being: 16.06.2025 -

Self - Rs. 9,95,000/-; 21.06.2025 - Self - Rs. 9,00,000/-; 06.07.2025 - ATM -

Rs. 10,000/-; 23.07.2025 - ATM - Rs. 10,000/-; 24.07.2025 - ATM - Rs. 1,000/-

, Rs. 1,500/-, Rs. 500/- and Rs. 500/-.

19. The Respondent No. 2 contended that an application (IA-4604/2025) was

filed before the Adjudicating Authority seeking return of the unauthorised

withdrawal of Rs. 19,17,500/-. The Appellant appeared on 08.12.2025 but

thereafter failed to appear despite notice, compelling the Adjudicating Authority

to proceed ex-parte and pass the impugned order dated 03.08.2026 directing

return of the said amount. The Appellant's subsequent recall application (RA-

73/ND/2026) was dismissed by the Adjudicating Authority vide order dated

20.08.2026.

20. The Respondent No. 2 submitted that the amount of Rs. 19,17,500/-

constitutes an unauthorised withdrawal because, under Section 154 of the Code,

2016, the estate of the bankrupt vests in the Bankruptcy Trustee immediately from

the date of appointment without any conveyance, assignment or transfer. The

Page 9 of 13 Respondent No. 2 stated that any amount lying in the account of the Bankrupt

forms part of the bankruptcy estate under Section 155 of the Code and is to be

distributed to the creditors under Section 178 of the Code.

21. The Respondent No. 2 contended that the withdrawal is illegal as it was

made after due intimation given by the Bankruptcy Trustee vide letter dated

30.05.2025. The Respondent No. 2 further submitted that while the Appellant

seeks exclusion of the assets under Section 79(14) of the Code, the Insolvency

and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process

for Personal Guarantors to Corporate Debtors) Rules, 2019 prescribe that the

value of unencumbered personal ornaments under clause (c) of the said sub-

section shall not exceed one lakh rupees.

22. The Respondent No. 2 stated that the Appellant failed to avail the ample

opportunities granted by the Adjudicating Authority and therefore cannot raise

the plea at this stage. The Respondent No. 2 contended that the present appeals

are without any merit or ground and are liable to be dismissed outright.

23. Concluding the arguments, the Respondent No.2 requested this Appellate

Tribunal to dismiss both appeals.

Page 10 of 13

Findings

24. We have already noted the rival contentions of the parties in preceding

paragraphs. The material facts are not in dispute. The Appellant was declared

bankrupt on 21.05.2025 and Respondent No. 2 was appointed Bankruptcy

Trustee. The Union Bank of India statement of her savings account, filed by both

sides and admittedly authentic, shows Rs. 19,07,366.46 at her credit on that date.

Between 16.06.2025 and 24.07.2025 the whole of it was drawn out: two Self

withdrawals of Rs. 9,95,000.00 and Rs. 9,00,000.00, and six ATM withdrawals

totalling Rs. 23,500.00, leaving Rs. 114.32. The Appellant does not deny any

withdrawal and her own table lists them. Her defence is one of law and hardship,

not of fact.

25. It may be stated that the correct test is vesting, not moratorium. The

Trustee's intimation of 30.05.2025 and his application, and the Appellant's plea

of being unaware of the moratorium, all proceed on a wrong label. We observe

that Section 128(1)(c) of the code restrains creditors from acting against the

bankrupt's property; it does not regulate the bankrupt. We need to appreciate that

the estate, comprising all property belonging to the bankrupt at the

commencement date, vests in the Trustee by operation of law, without any

conveyance, assignment or transfer. Thus, it is clear that money at credit in a bank

account is property and from 21.05.2025, the balance was the Trustee's to hold,

Page 11 of 13 and every withdrawal by the Appellant was a dealing with property that was not

hers to deal with.

26. We are of clear opinion that the plea of unawareness is no defence to

vesting, which does not depend on the bankrupt's knowledge, and is in any case

unproved. It has been brought to our notice that the Trustee's intimation was

delivered to the Appellant on 05.06.2025 , eleven days before the first withdrawal

and she was represented at the creditors meeting on 01.07.2025 and further she

wrote to the Trustee about her accounts on 22.07.2025, after which the ATM

withdrawals of 23-24.07.2025 followed.

27. We would like to state that the jewellery sale proceeds of Rs. 13,25,248.00

(69.5 % of the balance) are not excluded assets as Section 155(2)(a) excludes only

"excluded assets" as defined in section 79(14) of the code. The Clause (c) protects

only unencumbered personal ornaments which cannot be parted with, in

accordance with religious usage, of a value not exceeding Rs. 1,00,000/- (Rule

5(a) of the 2019 Bankruptcy Rules). We are not in position to accept the

pleadings of the appellant because the proceeds are more than thirteen times the

cap prescribed in the regulations. Further the exclusion attaches to described

assets, not to money. It has also been brought to our notice that on the

commencement date, the Appellant held no ornaments (her Form-E shows

jewellery as Nil but a bank balance, which none of clauses (a) to (e) of section

79(14) of the code mentions, and nothing in the Code carries the protected

character over to sale proceeds.

Page 12 of 13

28. We are of considered opinion that claimed hardship by the Appellant

cannot enlarge section 79(14) of the code, which is a closed list. We also do not

find any rationale for withdrawal of Rs. 18,95,000/- by the Appellant in five days

without explanation.

29. We note that the recall application (RA-73/ND/2026) was dismissed. It

needs to be appreciated that recall is not a matter of right. The Appellant's case

that her counsel could not be heard on 03.08.2026 for want of connectivity is not

supported by any record. We have noted that notice had been served to the

Appellant on 22.09.2025 and no reply had been filed for over ten months. Even

on the Appellant's version, no prejudice is shown. Thus, we do not find any merit

in the contents of the appellant regarding denial of recall application by the

Adjudicating authority.

30. Based on the above analysis, we do not find any merit in either of the

appeals. The appeals fail and stand rejected. No order as to cost. IA, if any, stands

closed.

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Naresh Salecha] Member (Technical) Sim

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