Bank of India vs. Pradeep Goel: NCLT Approves Rejection of Repayment Plan

Creditors and Debtor Entitled to Initiate Bankruptcy Proceedings Following Repayment Plan's Rejection

In a significant development, the National Company Law Tribunal (NCLT), Principal Bench, New Delhi, has approved the rejection of a repayment plan submitted by Mr. Pradeep Goel, the personal guarantor, in the case of Bank of India versus Mr. Pradeep Goel. The tribunal's decision allows creditors and the debtor to proceed with bankruptcy applications under Chapter IV of the Insolvency and Bankruptcy Code (IBC).

The case revolves around the insolvency proceedings against Mr. Goel, who stood as a guarantor for loans availed by M/s Shree Raj Mahal Jewellers Private Limited, declared a Non-Performing Asset (NPA) in June 2015. The financial creditor, Bank of India, initiated a Personal Insolvency Resolution Process (PIRP) against Mr. Goel, which led to the appointment of Mr. Anil Kohli as the Resolution Professional.

Despite multiple revisions of the repayment plan, the final proposal garnered only 57.81% approval from the creditors, falling short of the mandatory 75% needed under Section 111 of the IBC. The tribunal noted the RP's adherence to the Code and dismissed claims of bias or procedural lapses. It emphasized the creditors' dissatisfaction with the offered amount, which was significantly less than their admitted claims totaling approximately INR 1267 crores.

This decision underscores the tribunal's limited scope in interfering with creditors' commercial decisions and highlights the importance of adhering to statutory timelines and requirements in insolvency proceedings.

Bottom Line:

Insolvency and Bankruptcy Code - Rejection of repayment plan under Section 114 of IBC, 2016 - Creditors entitled to proceed under Chapter IV for bankruptcy application.

Statutory provision(s): Insolvency and Bankruptcy Code, 2016: Sections 100, 101, 110, 111, 112, 113, 114, 115, 121, 122, 123, and relevant regulations.

Bank of India v. Mr. Pradeep Goel, (NCLT)(Principal Bench, New Delhi) : Law Finder Doc Id # 2821792