NCLT Mumbai Admits Personal Insolvency Plea Against Frost International's Guarantor Over ₹671.56 Crore Default

The National Company Law Tribunal (NCLT) at Mumbai has admitted personal insolvency resolution proceedings against Poonam Anoop Wadhera, the personal guarantor of Frost International Limited, in connection with a default of Rs 671.56 crore

A coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar admitted the petition filed by Canara Bank Limited under Section 95 of the Insolvency and Bankruptcy Code.

“Considering the above facts and circumstances and upon perusal of the documents on record, the C.P. (IB) / 37 / MB /2025 filed under Section 95 of the Code, hereby admitted and the Insolvency Resolution Process stands initiated against Poonam Anoop Wadhera viz. the Personal Guarantor herein,” the tribunal said.

The application arose from credit facilities sanctioned to Frost International Limited between January and July 2014, including fund-based and non-fund-based working capital limits. These facilities were secured by hypothecation of assets, mortgage of immovable properties and personal guarantees executed on May 12, 2014, by multiple guarantors.

Following defaults, the loan account of the corporate debtor was classified as a non-performing asset, and the bank invoked the personal guarantee by issuing a demand notice under Section 13(2) of the SARFAESI Act on January 21, 2019, calling upon the borrower and guarantors to discharge the outstanding dues.

Wadhera opposed the petition on several grounds, including limitation, alleged non-service of statutory notices, lack of informed consent, and her limited role and 0.09% shareholding in the corporate debtor. She also relied on a civil suit (Diary No. 5246418/2025) filed before the Delhi High Court challenging the validity and enforceability of the deed of guarantee.

Rejecting these objections, the tribunal held that the challenge to the deed of guarantee had been raised at a belated stage and was unsupported by any reliable evidence.

It observed, “In the absence of any clear and reliable evidence to impugn the authenticity or legality of the Deed of Guarantee, mere challenge at a later stage cannot invalidate the contractual obligation undertaken by the Personal Guarantor.”

Finding no violation of the provisions of the Code, the tribunal admitted the application, declared a moratorium under Section 101 of the Code, and appointed Pramod Kumar Ramesh Ladda as the resolution professional.