The National Company Law Tribunal (NCLT) has initiated an insolvency resolution process against Ritu Chhabria, the personal guarantor of Raghuleela Infraventures Private Limited, after the company defaulted on a significant debt of Rs 30.29 crores. The loan was originally provided by Indiabulls Housing Finance Limited (IHFL) in 2017, with the default occurring in March 2020.
Raghuleela Infraventures had approached IHFL in March 2017, seeking a total loan of ₹283 crores. The loan was sanctioned in two phases, with the first installment of ₹150 crores and the second of ₹131.40 crores. The loan facilities were secured by various agreements, including mortgage, hypothecation, guarantee, and share pledge agreements, with Chhabria acting as the personal guarantor, undertaking to fulfill the borrowers’ obligations.
Despite the contractual obligation to repay the loans in regular EMIs, the debtor company defaulted on both interest and principal payments on March 9, 2020. This default led IHFL to issue two separate notices on the same day, recalling the outstanding loan amounts and invoking the personal guarantees. However, Chhabria did not fulfill her payment obligations under the Deeds of Guarantee, leading to her default.
In her defense, Chhabria argued that a corporate insolvency resolution process had already been initiated against the debtor company. She further stated that injunction orders were in effect against the principal borrower in arbitration proceedings pending before the Delhi High Court, and that the Bombay High Court had issued orders restricting her from dealing with her movable and immovable properties. Chhabria contended that initiating insolvency proceedings against her would be redundant, as it would result in parallel proceedings against both the principal borrower and the personal guarantor. She also asserted that IHFL had already sought remedy through arbitration, rendering the current proceedings against her impermissible.
After reviewing the submissions, the NCLT concluded that the arbitration proceedings initiated by IHFL for debt recovery from both the debtor company and Chhabria would not impact the insolvency resolution process. The Tribunal emphasized that the insolvency resolution process against Chhabria as a personal guarantor was independent of the debt recovery actions undertaken by IHFL through arbitration or other means. Consequently, the NCLT has initiated the insolvency resolution process against Ritu Chhabria.
