NCLT Mumbai Admits Insolvency Plea Against Videocon Guarantor Venugopal Dhoot Over ₹6,157 Crore Default

The National Company Law Tribunal at Mumbai has admitted a personal insolvency application filed by State Bank of India against Venugopal Nandlal Dhoot, promoter of the Videocon Group and personal guarantor to Videocon Industries Limited and Videocon Telecommunications Limited, involving a default of Rs 6,157 crore.

A Bench of Judicial Member Nilesh Sharma and Technical Member Charanjeet Singh Gulati admitted the application filed under Sections 95 and 97 of the Insolvency and Bankruptcy Code, on finding that the requirements of the provision stood satisfied.

“Considering the above facts and circumstances and upon perusal of the documents on record viz. the demand notices, proof of service, guarantee deeds, joint deed of guarantee, etc., the C.P. (IB) 1197/MB/2020 filed under Section 95 of the IBC, 2016 is hereby Admitted and the Insolvency Resolution Process stands initiated against Mr. Venugopal Nandlal Dhoot viz. the Respondent herein,” the tribunal said.

The application was filed by State Bank of India through resolution professional Asish Narayan seeking initiation of personal insolvency proceedings against Dhoot in his capacity as a personal guarantor for an amount of Rs.6,157 crore.

Videocon Telecommunications Limited and Videocon Industries Limited had availed credit facilities from SBI under agreements dated May 31, 2010, August 8, 2012 and May 25, 2012.

Dhoot executed deeds of guarantee dated August 30, 2010, August 8, 2012 and May 25, 2012 securing repayment of these facilities.

Following defaults, demand notices were issued in January 2018 to the borrower companies. Demand notices invoking the guarantees were issued to Dhoot in February 2018. Insolvency proceedings against the borrower companies were admitted in June 2018.

A demand notice under the insolvency framework dated July 23, 2020 called upon Dhoot to pay Rs 6,157 crore. The amount was not repaid within fourteen days. The present application was thereafter filed on September 1, 2020.

Dhoot contended that the application was not maintainable as one of the guarantees had been executed in favour of SBICAP Trustee Company Limited and not SBI. It was also argued that the claim was barred by limitation.

The tribunal held that the guarantee in favour of the security trustee related to one of the facilities, while other guarantees had been executed in favour of the lenders, including SBI. It also noted that the trustee acted on behalf of the lenders.

On limitation, the tribunal held that the default in respect of the personal guarantor arose upon failure to comply with the demand notice issued in July 2020. Since the application was filed in September 2020, it was within the limitation.

The tribunal admitted the application, initiated the insolvency resolution process against Dhoot, and declared a moratorium under Section 101 in relation to his debts.

Asish Narayan, who had earlier been appointed as resolution professional, will continue to carry out the process in accordance with the Code.