Supreme Court Issues Notice On Plea Against NCLAT Relief To Former Deccan Chronicle Promoter

The bankruptcy proceedings had been set aside by NCLAT on April 2, 2026, after the appellate tribunal on the same date quashed the underlying personal insolvency proceedings initiated against Reddy under Section 95 of the Insolvency and Bankruptcy Code, holding them to be barred by limitation.

A vacation bench of Justices Joymalya Bagchi and Vipul M. Pancholi issued notice and directed that the matter be heard along with a connected appeal challenging the NCLAT's order setting aside the personal insolvency proceedings against Reddy.

“Issue Notice. Tag with Civil Appeal 7997 of 2026.”, the Court said.

The dispute arose from insolvency proceedings initiated by L&T Finance Ltd against T. Venkatram Reddy, former promoter and personal guarantor of Deccan Chronicle Holdings Limited, in relation to a Rs. 25 crore term loan extended to the company under a facility agreement dated May 13, 2011.

After the company defaulted, L&T invoked arbitration, obtained an arbitral award on March 15, 2013 and pursued execution proceedings before the Bombay High Court. Subsequently, it initiated insolvency proceedings against the personal guarantor under Section 95 of the Insolvency and Bankruptcy Code.

The NCLT Hyderabad had admitted the Section 95 application on June 24, 2022. However, the NCLAT examined whether the proceedings were barred by limitation. The creditor's own demand notice dated January 20, 2020 recorded the date of default as August 1, 2012, more than three years prior to initiation of the insolvency process.

NCLAT held that the creditor could not rely on the concept of a continuing guarantee under Section 129 of the Contract Act to extend limitation. It observed that the IBC treats default as a specific and identifiable event and that the date of default disclosed in the statutory notice could not subsequently be altered to overcome limitation.

NCLAT set aside the NCLT's admission order, holding that the Section 95 proceedings against the personal guarantor were time-barred. As a consequence in a subsequent order dated April 2, 2026, NCLAT also set aside the bankruptcy order dated December 19, 2025 passed under Section 123 of the IBC, observing that once the admission order had been quashed, all consequential bankruptcy proceedings had to fall.