NCLAT Upholds Chamber Constructions' Liquidation, Says Parallel CIRP Against Borrower And Guarantor Maintainable

The National Company Law Appellate Tribunal (NCLAT) at Delhi has upheld the liquidation of Chamber Constructions Pvt Ltd. It held that simultaneous insolvency proceedings can continue against principal borrower RNA Corp and Chamber Constructions, which had furnished a corporate guarantee for the same debt.

“Hon'ble Supreme Court has delivered its judgement in ICICI Bank Ltd. v. Era Infrastructure (India) Ltd.; 2026 SCC Online SC 314 on 26.02.2026, and has not barred holding simultaneous CIRP proceedings against both principal debtor and corporate guarantor and such proceedings are maintainable under the existing provisions of the law. Thus, proceedings against both the principal borrower and also the Corporate Guarantor in this case can be proceeded against simultaneously.”, it observed.

A bench of Judicial Member Justice N. Seshasayee and Technical Members Arun Baroka and Indevar Pandey rejected promoter Gokul Aggarwal's challenge to Chamber Construction's liquidation.

Aggarwal argued that liquidation proceedings against Chamber Constructions should be kept in abeyance while the RNA Corp matter remained pending before the Supreme Court.

Chamber Constructions had furnished a corporate guarantee for debt advanced to its holding company RNA Corp. Bank of Baroda initiated insolvency proceedings against Chamber Constructions. Bank of India separately initiated insolvency proceedings against RNA Corp for the same debt.

Aggarwal, a promoter and member of RNA Corp's suspended board, had earlier challenged the maintainability of these parallel proceedings before the appellate tribunal. The challenge failed, as did a review plea.

The Supreme Court passed a status quo order in Aggarwal's appeal in 2021 in the RNA Corp matter. However, during the pendency of the present appeal, the Supreme Court settled the legal issue in ICICI Bank Ltd v Era Infrastructure (India) Ltd.

“And therefore, the substratum on which appeal was being adjourned, no longer exists.”

The tribunal also rejected attempts to keep liquidation in abeyance on the basis of a possible settlement. It noted that once liquidation has commenced, withdrawal of insolvency proceedings is unavailable, and the only route for settlement would be under the Companies Act.

“In the facts and circumstances of the case, we are satisfied that the Adjudicating Authority was right in dismissing the IAs and allowing the liquidation proceeding to go on.”

Accordingly, the tribunal upheld the liquidation of Chamber Constructions. It allowed the liquidator to proceed further.