NCLT issues notice to former Unitech directors in personal insolvency case over ₹175 crore loan – CNBC TV18

The National Company Law Tribunal (NCLT) on Monday (December 9) issued notice to former Unitech directors Ajay Chandra and Ramesh Chandra in personal insolvency petitions filed by IDBI Bank in connection with an outstanding loan of a Unitech subsidiary, reported Bar and Bench.

A Bench of the NCLT, consisting of Judicial Member M Sankariah Shanmuga Sundaram and Technical Member Dr Sanjeev Ranjan, approved the issuance of a notice through all available modes after IDBI Bank’s lawyer informed the tribunal that they were unable to serve the petition to Ajay and Ramesh Chandra directly.

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IDBI Bank has moved the NLCT over a loan of ₹175 crore availed by QNS Facility Management Private Limited, a subsidiary of Unitech. Ajay and Ramesh were personal guarantors for the loan. The company defaulted in repaying the loan in 2017, leading the bank to initiate personal insolvency against them, Bar and Bench reported.

A personal guarantor is an individual who formally commits to repaying a loan or credit facility taken by a company. If the company defaults on the repayment, the lender can seize the assets of the personal guarantor to recover the debt.

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In 2019, the Insolvency and Bankruptcy Code (IBC) was amended to enable creditors or the Resolution Professional (RP) of a company to seek enforcement of personal guarantees for recovery of dues, Bar and Bench said.