NCLT Delhi Approves ₹1.89 Crore Repayment Plan For Woolways India Personal Guarantor

The National Company Law Tribunal (NCLT) at Delhi has approved a repayment plan worth ₹1.89 crore proposed by Babita Nayar, personal guarantor to Woolways India Limited.

The plan envisages repayment to creditors within five months through the sale of immovable properties and financial assistance from friends and relatives.

A bench of Judicial Member Bachu Venkat Balaram Das and Technical Member Ravindra Chaturvedi also clarified, in a connected matter, that an earlier direction requiring the State Bank of India (SBI) to deposit ₹2 lakh into the account of the Resolution Professional was only an interim measure intended to facilitate the insolvency process. It was not a determination of the final professional fee payable.

The bench observed that it was “not inclined to enter into the inter se dispute between the parties regarding the exact fee payable to the Resolution Professional under the said arrangement.”

It clarified that the ₹2 lakh directed to be deposited was to be treated “towards the initial expenses for carrying out the Personal Insolvency Resolution Process (PIRP), as in the cases of initiation of CIRP.”

The proceedings arose from SBI's insolvency application against Babita Nayar, who had furnished a personal guarantee for borrowings availed by Woolways India Limited. SBI claimed outstanding dues of more than ₹44.62 crore.

Following commencement of the personal insolvency process, Nayar prepared a repayment plan in consultation with Resolution Professional Ashish Agarwal and the creditors. The proposal was subsequently placed before creditors for voting.

SBI, holding a voting share of 57.24%, voted in favour of the plan. Ramsons Tyres and Sai Industries also supported it. Standard Chartered Bank, which held a voting share of 40.98%, abstained from voting.

It later informed the Resolution Professional that technical difficulties had prevented it from casting its vote within the prescribed period and conveyed its support for the proposal.

The tribunal noted that the repayment plan had secured the requisite statutory majority. It therefore approved the proposal.

Under the approved plan, SBI is to receive about ₹1.10 crore, while Standard Chartered Bank is to receive nearly ₹79 lakh. The total amount proposed to be distributed to creditors is ₹1.89 crore.

The tribunal noted that the plan complied with the requirements applicable to personal guarantor insolvency proceedings. It also recorded that the guarantors had offered all assets other than those excluded under the insolvency framework and proposed to raise funds through property sales and support from relatives and friends.

In the separate dispute concerning remuneration, SBI sought modification of an earlier direction requiring it to deposit ₹2 lakh with the Resolution Professional. The bank relied on a 2021 appointment letter under which a fee arrangement had been agreed.

Declining to adjudicate the dispute over the exact amount payable, the tribunal clarified that the deposit order was issued only as “an interim facilitative measure to ensure that the insolvency resolution process proceeds smoothly and without interruption in a time-bound manner.”

It further held that the direction “cannot be construed as an adjudication of the final professional fee payable to the Resolution Professional.”