NCLT Ahmedabad Admits Insolvency Plea Against Osia Hyper Retail's Personal Guarantor

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted an application filed by Unity Small Finance Bank Limited and initiated insolvency resolution proceedings against Kavita Dhirendra Chopra, the personal guarantor of Osia Hyper Retail Limited. The application was filed in relation to an alleged default of Rs. 10,03,58,635.

A bench of Judicial Member Chitra Hankare and Technical Member Dr. V.G. Venkata Chalapathy observed,

“The Personal Guarantee Agreement mentions that the guarantor is one of the signatories to the binding MOU signed between the parties (Bank, Anchor(CD) and the Guarantor) for Rs 15 crores. The Facility is a vendor finance facility sanctioned by the bank and the guarantee agreement has specified that the respondent has unconditionally guaranteed the performance of borrower in terms of the facility agreement and other transactions documents.”

Unity Small Finance Bank submitted that Osia Hyper Retail Ltd. was registered as a buyer on the Trade Receivables Discounting System (TReDS) platform. It stated that vendors uploaded invoices on the platform. The bank funded approved invoices by directly disbursing money to vendors on behalf of the corporate debtor.

The bank contended that the transactions were governed by agreements executed between RXIL and the corporate debtor, RXIL and the bank, and a Memorandum of Understanding dated February 14, 2023. It argued that the MoU applied to bill discounting facilities availed on the TReDS platform. According to the bank, the MoU covered both vendor finance and factoring facilities.

The bank stated that the last payment was received on March 17, 2025. It contended that the account thereafter turned irregular.

The bank issued a recall notice on May 22, 2025, followed by a demand notice on July 17, 2025. Despite these notices, the outstanding amount was not repaid.

Earlier, the tribunal had appointed Abhishek Choudhary to examine the matter and submit a report under the Insolvency and Bankruptcy Code. In his report dated February 21, 2026, he recommended that the application be rejected. According to the report, the corporate debtor had availed two separate and independent bill discounting facilities. Each facility, he noted, was governed by a different set of agreements.

Chopra contended that the personal guarantee was executed only for the vendor finance arrangement. She further contended that the amount availed under the MoU had been repaid in full by May 2025.

After examining the record, the tribunal observed:

“We observe from the documents that the respondent PG is a director in the CD who is registered with Trade Receivables Exchange of India Limited (TReDS) as a 'buyer' to which the Financial Creditor had granted credit facilities which was guaranteed by the respondent through a deed of Guarantee dated 13.02.2023.”

The tribunal further observed:

“Recall notice issued vide letter dated 22.05.2025 to the respondent (and the CD) amounts to invocation of the guarantee as it seeks repayment in the capacity of guarantor.”

The tribunal admitted the application and initiated insolvency resolution proceedings against Chopra. It also imposed a moratorium for 180 days.