MR K C M GOWDA vs ADITYA BIRLA CAPITAL LIMITED

- 1 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR
®




IN THE HIGH COURT OF KARNATAKA AT BENGALURU

RD
DATED THIS THE 3 DAY OF JUNE, 2026

BEFORE


THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

WRIT PETITION NO. 16159 OF 2026 (GM-RES)

BETWEEN:

MR K C M GOWDA
S/O SHRI K. CHANNAPPA,
AGED ABOUT 68 YEARS,
ND
RESIDING AT #99, 2 CROSS,
NEAR ISRO LAYOUT, SRI SAI LAYOUT,
HAROHALLI, SINGANAYAKANAHALLI,
BENGALURU - 560 064.
EMAIL [email protected]

…PETITIONER
(BY SRI. A S VISHWAJITH., ADVOCATE)

AND:

1. ADITYA BIRLA CAPITAL LIMITED
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT,
HAVING ITS REGISTERED / BRANCH OFFICE AT
TH
NO.1(78), STAR AVENUE, 6 CROSS,
VICTORIA LAYOUT,
BANGALORE 560025.
BY ITS MANAGER
E-MAIL [email protected]/
[email protected]

2. ACE EMBEDDED INTENSIVE CARE
UNITS PRIVATE LIMITED
(UNDER CORPORATE INSOLVENCY
RESOLUTION PROCESS)
CIN U74999KA2018PTC114976
PLOT NO. SPECIAL Q3 & R,
NO 9, TKN TOWER, BANNERGHATTA ROAD,
BANGALORE SOUTH,











Digitally signed
by SHWETHA
RAGHAVENDRA
Location: HIGH
COURT OF
KARNATAKA

- 2 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


BANGALORE, KA 560 076.
BY ITS MANAGER.
E-MAIL [email protected]

…RESPONDENTS
(BY SRI. C.K. NANDAKUMAR SR. ADVOCATE FOR
SRI. AHAAN MOHAN &
MRS. AKANKSHA CHOUDHARY., ADVOCATE FOR R1)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE
NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT,
ORDER OR DIRECTION QUASHING AND SETTING ASIDE THE
IMPUGNED ORDER DATED 30.03.2026 (UPLOADED ON 21.05.2026)
PASSED BY THE HONBLE NCLT, BENGALURU IN CP (IB)
NO.240//BB/2025 ANNEXURE-A AND ETC.

THIS WRIT PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

ORAL ORDER


1. The Petitioner is before this Court seeking for the
following reliefs:
a. Issue an appropriate writ in the nature of certiorari
or any other appropriate writ, order or direction
quashing and setting aside the Impugned Order dated
30.03.2026 (uploaded on 21.05.2026) passed by the
Hon'ble NCLT, Bengaluru in CP (IB)
No.240//BB/2025; Annexure A
b. Direct the Hon'ble the Hon'ble National Company
Law Tribunal, Bengaluru to appoint a Resolution
Professional in terms of section 97 of the Insolvency
and Bankruptcy Code, 2016 in CP (IB)
No.240/BB/2025;

- 3 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


c. Pass any such further orders as may be deemed
just and expedient in the facts and circumstances of
the present case, in the interest of justice and equity.


2. The Petitioner had instituted proceedings before the
National Company Law Tribunal, Bengaluru Bench, in
CP(IB) No.240/BB/2025 under Section 94(1) of the
Insolvency and Bankruptcy Code, 2016. The case of
the Petitioner before the Tribunal was that he had
furnished a personal guarantee in favour of M/s.
Aditya Birla Capital Limited in respect of credit
facilities extended by the said financial creditor to
Ace Embedded Intensive Care Units Private Limited.
According to the Petitioner, the personal guarantee
was invoked pursuant to a notice dated 20.05.2025
issued by M/s. Aditya Birla Capital Limited under
Section 13(2) of the SARFAESI Act, 2002. On that
basis, the Petitioner asserted that he was entitled to
invoke Section 94 of the Insolvency and Bankruptcy
Code, 2016 and seek initiation of the insolvency
resolution process in his capacity as a personal
guarantor.

3. Upon issuance of notice and after hearing the
parties, the National Company Law Tribunal, by its
order dated 30.03.2026, dismissed the application,
holding that the Petitioner lacked the requisite locus

- 4 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


standi to maintain the proceedings. Aggrieved by the
said order, the Petitioner has approached this Court
in the present writ petition challenging its legality
and correctness.

4. Though it was brought to the notice of the learned
counsel for the Petitioner that an efficacious
alternative statutory remedy was available by way of
an appeal before the National Company Law
Appellate Tribunal, the learned counsel, upon
instructions from the Petitioner, nevertheless insisted
that the matter be heard on merits. In view thereof,
this Court put the Petitioner on notice that, should
the matter be entertained and ultimately decided
against him, the Court would be inclined to impose
exemplary costs, having regard to the availability of
the alternative appellate remedy and the insistence
on invoking the extraordinary writ jurisdiction of this
Court.

5. The submissions of Sri A.S. Vishwajith, learned
counsel appearing for the Petitioner submits that
Section 94 of the Insolvency and Bankruptcy Code,
2016 enables a debtor to initiate an insolvency
resolution process by making an application before
the Adjudicating Authority. According to him, the

- 5 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


expression “debtor” occurring in Section 94 is of
sufficient amplitude to include a personal guarantor
and, therefore, a personal guarantor is entitled to
invoke the said provision.

6. Though, during the course of hearing, certain queries
were raised by this Court as to the manner in which
a personal guarantor would answer the description of
a debtor for the purposes of Section 94, Sri
Nandkumar, learned Senior Counsel appearing for
the respondent, submitted that he would not press
that aspect of the matter. His principal contention,
however, was that the Petitioner is not a personal
guarantor at all, but is, in fact, a co-borrower in
respect of the credit facility extended by M/s. Aditya
Birla Capital Limited.

7. It is in the above factual backdrop that learned
counsel for the Petitioner was called upon to identify
and place on record the personal guarantee allegedly
executed by the Petitioner in favour of M/s. Aditya
Birla Capital Limited, on the strength of which the
Petitioner seeks to invoke Section 94 of the Code.

8. In response thereto, learned counsel relied upon the
sanction letter issued by M/s. Aditya Birla Capital
Limited in favour of Ace Embedded Intensive Care

- 6 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


Units Private Limited as the principal borrower and
certain other persons associated with the
transaction. He contended that the said sanction
letter was also addressed to the Petitioner, who is
described therein as a co-borrower.

9. Learned counsel further relied upon the Facility
Agreement dated 11.11.2023 and, in particular, the
recital relating to the parties thereto. Referring to the
said recital, he submitted that the agreement
distinguishes between “borrowers”, who are
described in Schedule I, Part A, and “co-borrowers”,
who are described in Schedule I, Part B. The name of
the Petitioner finds place in Schedule I, Part B.
However, neither the recital nor the schedules make
any reference to the Petitioner as a personal
guarantor.

10. Learned counsel also referred to the deed evidencing
the creation of an equitable mortgage by deposit of
title deeds, under which properties belonging to the
borrower as well as certain properties belonging to
the Petitioner were offered as security. On that basis,
he contended that the demand and enforcement
measures initiated by M/s. Aditya Birla Capital
Limited are, in substance, referable to the obligations

- 7 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


undertaken by the Petitioner as a personal
guarantor.

11. In support of the aforesaid contention, learned
counsel placed reliance on the demand notice dated
24.06.2025 issued in Form B under Rule 7(1) of the
Insolvency and Bankruptcy (Application to
Adjudicating Authority for Insolvency Resolution
Process for Personal Guarantors to Corporate
Debtors) Rules, 2019. According to him, the very
issuance of such notice demonstrates that M/s.
Aditya Birla Capital Limited itself treated and
recognised the Petitioner as a personal guarantor.

12. On the basis of the above materials, learned counsel
contended that the Petitioner satisfies the
requirements of Section 94 of the Insolvency and
Bankruptcy Code, 2016 and that the National
Company Law Tribunal ought to have entertained the
application and proceeded in accordance with law by
appointing a Resolution Professional under Section
97(5) of the Code, either on the recommendation of
the Board or otherwise in terms of the statutory
scheme.

13. It was further contended that, at the stage of
considering an application under Section 94, the

- 8 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


Adjudicating Authority is not vested with the
jurisdiction to adjudicate upon the disputed question
as to whether the applicant is, in fact, a personal
guarantor. According to learned counsel, the Tribunal
exceeded the limits of its jurisdiction by undertaking
such an adjudication and dismissing the application
on that basis.

14. Learned counsel therefore submits that the
impugned order is without jurisdiction and liable to
be set aside and a consequential remand of the
matter to the National Company Law Tribunal for
consideration of the application afresh and for
appointment of a Resolution Professional in
accordance with the provisions of the Code.

15. Per contra, Sri C.K. Nandakumar, learned Senior
Counsel appearing on behalf of the respondent,
vehemently opposed the writ petition and supported
the order passed by the National Company Law
Tribunal. His submissions, in substance, are as
follows:

15.1. Learned Senior Counsel submitted that the
entire edifice of the Petitioner's argument
proceeds on an erroneous understanding of the
statutory scheme contained in Part III of the

- 9 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


Insolvency and Bankruptcy Code, 2016.
According to him, the filing of an application
under Section 94 does not automatically result
in the commencement of an insolvency
resolution process requiring the appointment of
a Resolution Professional. The provisions
contained in Sections 94 to 100 of the Code
contemplate a structured process involving
scrutiny by the Adjudicating Authority at
different stages, and the Tribunal is not
expected to function as a mere post office
mechanically forwarding every application for
appointment of a Resolution Professional.

15.2. Learned Senior Counsel submitted that every
judicial or quasi-judicial forum is required, at
the threshold, to satisfy itself that the person
invoking its jurisdiction possesses the requisite
legal standing to do so. The requirement of
locus standi is a foundational jurisdictional
requirement and constitutes the minimum
threshold that must be crossed before any
statutory process can be set in motion. Unless
the applicant demonstrates that he falls within
the category of persons entitled to invoke the

- 10 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


particular provision, the question of proceeding
further under the statute would not arise.

15.3. It was submitted that Section 94 can be
invoked only by a person who answers the
description of a debtor entitled to seek initiation
of the insolvency resolution process under the
statutory framework. Therefore, when an
application is presented under Section 94 on
the assertion that the applicant is a personal
guarantor, the Adjudicating Authority is
necessarily required to satisfy itself, at least
prima facie, as to whether such assertion has
any factual or legal foundation. Such an
examination, according to learned Senior
Counsel, is not only permissible but is
indispensable to the exercise of jurisdiction
under the Code.

15.4. Learned Senior Counsel contended that in the
present case the National Company Law
Tribunal has undertaken only such a limited
examination. The Tribunal has not entered upon
any adjudication of rival rights and liabilities nor
has it rendered any finding on the merits of any
insolvency claim. The Tribunal has merely

- 11 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


examined the documents produced by the
Petitioner and considered whether those
documents disclose the existence of a personal
guarantee executed by the Petitioner in favour
of the respondent-financial creditor.

15.5. According to learned Senior Counsel, upon a
consideration of the material placed before it,
the Tribunal found that the documents relied
upon by the Petitioner consistently described
him as a co-borrower and not as a personal
guarantor. In such circumstances, the Tribunal
concluded that the Petitioner had failed to
establish the very basis upon which jurisdiction
under Section 94 was sought to be invoked. It
is this limited conclusion which forms the basis
of the impugned order.

15.6. Learned Senior Counsel submitted that there is
a fundamental distinction between examining
whether a person has the legal standing to
maintain proceedings and adjudicating upon the
substantive rights arising in such proceedings.
While the former is a threshold jurisdictional
inquiry, the latter involves a determination of
disputed questions affecting the rights and

- 12 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


liabilities of the parties. The Tribunal, according
to him, has confined itself entirely to the former
exercise and has not ventured into the latter.

15.7. It was further submitted that the adjudicatory
functions contemplated under Chapter III of
Part III of the Code arise only after the
statutory process is validly invoked by a person
competent to do so. The determination of
issues relating to repayment plans, claims of
creditors, obligations of debtors, approval or
rejection of proposals and other substantive
matters contemplated under the Code would
constitute adjudication on merits. The inquiry
undertaken by the Tribunal in the present case
is qualitatively different and precedes the
commencement of such adjudicatory functions.

15.8. Learned Senior Counsel submitted that
acceptance of the Petitioner's contention would
lead to an anomalous situation whereby any
person, irrespective of whether he possesses
the status claimed by him, could invoke the
jurisdiction of the Adjudicating Authority and
compel the commencement of statutory
proceedings merely by making a bald assertion.

- 13 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


Such an interpretation would render the
threshold scrutiny by the Tribunal wholly
redundant and would be contrary to the scheme
and object of the Code.

15.9. Learned Senior Counsel also contended that the
Tribunal, being a creature of statute entrusted
with the administration of the insolvency
regime, necessarily possesses incidental and
ancillary powers to ascertain whether the
jurisdictional facts required for invocation of its
authority exist. The determination of such
jurisdictional facts cannot be equated with an
adjudication of the substantive dispute between
the parties.

15.10. It was therefore submitted that the finding
recorded by the Tribunal that the Petitioner
lacks the requisite locus standi is merely a
determination of a jurisdictional fact and not an
adjudication of the Petitioner's rights under the
Code. Consequently, the contention of the
Petitioner that the Tribunal has exceeded its
jurisdiction or exercised a power not vested in it
is wholly misconceived.

- 14 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR



15.11. Learned Senior Counsel lastly submitted that
the impugned order is a reasoned order passed
upon consideration of the documents relied
upon by the Petitioner himself and does not
suffer from any jurisdictional error, perversity,
procedural irregularity or patent illegality
warranting interference under Articles 226 and
227 of the Constitution of India. The writ
petition, according to him, is therefore liable to
be dismissed both on the ground of availability
of an efficacious statutory appellate remedy
and also on merits.

16. Heard Sri A.S.Vishwajith, learned counsel for the
Petitioner and Sri C.K.Nandakumar, learned Senior
counsel for respondent No.1. Perused papers.

17. In the above factual and legal backdrop, the short
question that arises for consideration in the present
matter is:
Whether, upon an application being filed under
Section 94 of the Insolvency and Bankruptcy
Code, 2016, the National Company Law Tribunal
is empowered to examine and determine the
locus standi of the applicant to invoke the said
provision and, if so, whether such an
examination and determination would amount
to an adjudication on the merits of the

- 15 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


insolvency application or constitute a mere
threshold jurisdictional scrutiny?

18. Section 94 of IBC, 2016 is reproduced hereunder for
easy reference:
94. Application by debtor to initiate insolvency
resolution process.— (1) A debtor who commits a
default may apply, either personally or through a
resolution professional, to the Adjudicating Authority for
initiating the insolvency resolution process, by
submitting an application.
(2) Where the debtor is a partner of a firm, such debtor
shall not apply under this Chapter to the Adjudicating
Authority in respect of the firm unless all or a majority
of the partners of the firm file the application jointly.
(3) An application under sub-section (1) shall be
submitted only in respect of debts which are not
excluded debts.
(4) A debtor shall not be entitled to make an application
under sub-section (1) if he is—
(a) an undischarged bankrupt;
(b) undergoing a fresh start process;
(c) undergoing an insolvency resolution process; or
(d) undergoing a bankruptcy process.
(5) A debtor shall not be eligible to apply under sub-
section (1) if an application under this Chapter has been
admitted in respect of the debtor during the period of
twelve months preceding the date of submission of the
application under this section.
(6) The application referred to in sub-section (1) shall
be in such form and manner and accompanied with such
fee as may be prescribed.

- 16 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR



19. A perusal of Section 94 of the Insolvency and
Bankruptcy Code, 2016 makes it clear that the right
to initiate an insolvency resolution process is not
conferred upon every person who approaches the
Adjudicating Authority. The provision specifically
enables a debtor who has committed a default to
initiate the insolvency resolution process by filing an
application before the Adjudicating Authority. Thus,
the very invocation of jurisdiction under Section 94 is
predicated upon the existence of certain foundational
requirements. The applicant must demonstrate, at
least prima facie, that he falls within the category of
persons entitled to invoke the provision, that the
statutory conditions prescribed therein are satisfied,
and that none of the disqualifications contained in
the provision operate against him.

20. Sub-sections (2) to (6) of Section 94 prescribe
various conditions, limitations and disqualifications
governing the maintainability of an application. The
legislative scheme therefore does not contemplate
automatic acceptance of every application filed under
Section 94. The entitlement to invoke the provision is
conditioned by statutory requirements which
necessarily require examination by the Adjudicating

- 17 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


Authority before the statutory process can be
permitted to proceed further.

21. It is a settled principle that every judicial and quasi-
judicial authority possesses the power, and indeed
the obligation, to ascertain whether the jurisdictional
facts necessary for assumption of jurisdiction exist.
Jurisdictional facts are those foundational facts upon
the existence of which the authority's power to act
depends. Unless such facts are established, the
authority cannot be compelled to proceed further
merely because an application has been presented
before it.

22. In the present case, the Petitioner's assertion that he
is a personal guarantor constitutes the very
foundation upon which he seeks to invoke Section
94. The respondent disputes that assertion and
contends that the Petitioner is merely a co-borrower.
The existence or otherwise of such status is therefore
not an incidental issue but a jurisdictional fact which
directly bears upon the maintainability of the
application.

23. When jurisdiction is invoked on the basis of a
particular legal status claimed by an applicant, the
Adjudicating Authority cannot be expected to accept

- 18 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


such assertion at face value and proceed
mechanically. Jurisdiction cannot be conferred by a
mere assertion made in an application. The existence
of the jurisdictional fact must first be established
before the authority proceeds to exercise powers
under the statute.

24. The distinction between an inquiry into jurisdictional
facts and an adjudication on merits must also be
borne in mind. An inquiry into jurisdictional facts is
concerned only with determining whether the
authority can validly entertain the proceedings.
Adjudication on merits, on the other hand, concerns
the determination of substantive rights, liabilities and
entitlements of the parties. The former necessarily
precedes the latter.

25. Thus, when the National Company Law Tribunal
examines whether an applicant possesses the
requisite locus standi to maintain an application
under Section 94, it is not adjudicating the
insolvency claim itself. It is merely determining
whether the applicant has crossed the threshold
necessary for the invocation of the statutory
mechanism.

- 19 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR



26. Such an exercise is akin to a civil court examining
whether a suit is maintainable, whether the plaintiff
possesses locus standi, whether the action is barred
by limitation, or whether the court possesses
jurisdiction to entertain the proceedings. The
determination of such preliminary issues cannot be
equated with adjudication of the substantive dispute.

27. Therefore, this Court is of the considered opinion that
the power to determine whether an applicant
satisfies the threshold requirements of Section 94
inheres in the jurisdiction of the Adjudicating
Authority itself. Such a determination neither
amounts to adjudication on merits nor constitutes an
impermissible exercise of jurisdiction.

28. As noticed hereinabove, this Court is not called upon
in the present proceedings to decide the larger
question as to whether a personal guarantor would,
in every circumstance, fall within the ambit of the
expression "debtor" occurring in Section 94 of the
Code. Learned Senior Counsel appearing for
respondent No.1 fairly submitted that he would not
press that contention. Consequently, this Court
refrains from expressing any opinion on the said

- 20 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


issue and leaves all questions relating thereto open
for consideration in an appropriate proceeding.

29. The controversy before this Court is considerably
narrower. The issue is whether a person claiming to
be a personal guarantor must first establish, at least
prima facie, the existence of such status before the
statutory machinery under the Code can be set in
motion.

30. The principal submission of the learned counsel for
the Petitioner is that upon presentation of an
application under Section 94, the Adjudicating
Authority is required to proceed under Section 97
and appoint a Resolution Professional and that no
inquiry regarding the applicant's locus standi can be
undertaken until a report is submitted under Section
99.

31. According to the learned counsel, any examination of
the Petitioner's status as a personal guarantor
amounts to an adjudicatory exercise which falls
outside the scope of the powers vested in the
Tribunal at the threshold stage. It is therefore
contended that the Tribunal exceeded its jurisdiction
in examining the Petitioner's locus standi prior to
appointment of a Resolution Professional.

- 21 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR



32. This Court is unable to accept the aforesaid
submission.

33. The submission proceeds on the assumption that the
filing of an application under Section 94
automatically obligates the Adjudicating Authority to
appoint a Resolution Professional irrespective of
whether the applicant possesses the legal capacity or
eligibility to invoke the provision. Such an
interpretation is neither borne out by the language
employed in the statute nor consistent with the
overall scheme of the Code.

34. The appointment of a Resolution Professional under
Section 97 cannot be viewed in isolation. The
statutory process presupposes that the application
has been validly instituted by a person entitled to
invoke the jurisdiction of the Adjudicating Authority.
Before the machinery contemplated under Sections
97, 99 and 100 is set in motion, the Tribunal is
necessarily entitled to satisfy itself that the
foundational jurisdictional facts exist.

35. If the contention advanced on behalf of the Petitioner
were to be accepted, the Adjudicating Authority
would be compelled to appoint a Resolution
Professional even in cases where the application is

- 22 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


filed by a person who is demonstrably not entitled to
invoke Section 94. Such an interpretation would
render the threshold scrutiny inherent in every
exercise of judicial power wholly redundant.

36. The consequences flowing from an application under
Section 94 are neither procedural nor insignificant.
Upon filing of such an application, the interim
moratorium contemplated under Section 96 comes
into operation. Such moratorium affects the rights
and remedies of creditors and places legal restraints
on proceedings relating to the debt concerned. The
legislature could not have intended that such
consequences should follow merely upon a self-
serving assertion made by an applicant without any
scrutiny whatsoever by the Adjudicating Authority.

37. The requirement of a preliminary examination by the
Adjudicating Authority therefore serves an important
statutory purpose. It acts as a safeguard against
abuse of the insolvency process and ensures that
only those persons who possess the requisite legal
status are permitted to invoke the protections and
consequences contemplated under the Code.

38. The determination of locus standi at the threshold
stage is therefore not only permissible but necessary

- 23 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


for preserving the integrity of the insolvency
framework. Such a determination is confined to
maintainability and jurisdiction and does not amount
to adjudication on the merits of the insolvency claim.

39. Applying the aforesaid principles to the facts of the
present case, this Court finds that the Petitioner has
failed to establish the very jurisdictional fact upon
which his application is founded.

40. The sanction letter relied upon by the Petitioner
describes him as a co-borrower. The Facility
Agreement also categorises him as a co-borrower.
Neither document records the execution of any
contract of guarantee by the Petitioner.

41. The mortgage documents produced before this Court
further indicate that the Petitioner represented the
borrower and participated in the creation of security
in favour of the creditor. These documents likewise
do not describe him as a personal guarantor.

42. The significance of these documents lies not merely
in what they state but equally in what they omit.
Commercial documents of this nature ordinarily
identify and distinguish the borrower, co-borrower,
guarantor and security provider. If the Petitioner had

- 24 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR


in fact executed a personal guarantee, the same
would ordinarily find place either in the transaction
documents themselves or in a separate deed of
guarantee.

43. Despite repeated opportunities granted both before
the Tribunal and before this Court, no deed of
guarantee, contract of guarantee, undertaking of
guarantee or any other instrument creating liability
as a guarantor has been produced.

44. The only material relied upon by the Petitioner in
support of his claim is the demand notice dated
24.06.2025 issued under Rule 7(1) of the Insolvency
and Bankruptcy (Application to Adjudicating
Authority for Insolvency Resolution Process for
Personal Guarantors to Corporate Debtors) Rules.

45. Merely because the creditor has described the
Petitioner as a personal guarantor in the said notice,
it does not follow that the Petitioner acquires the
legal status of a personal guarantor. Such status
must arise from a valid contractual instrument
creating obligations of guarantee and not from a
unilateral description contained in a subsequent
notice.

- 25 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR



46. Whether a person is a guarantor must be established
from the contractual documents governing the
transaction. In the absence of any document evidencing
the execution of a personal guarantee, the demand notice
by itself cannot establish the jurisdictional fact upon
which the maintainability of the application depends.

47. Thus, even assuming that the creditor has proceeded on
the footing that the Petitioner is a personal guarantor,
such an assertion cannot substitute for proof of the
underlying guarantee. The Petitioner's claim ultimately
rests upon a unilateral description contained in the
demand notice, which is wholly insufficient to establish
the foundational fact necessary to invoke Section 94.

48. The National Company Law Tribunal was therefore fully
justified in concluding that the Petitioner had failed to
establish the foundational requirement necessary for
invocation of Section 94. The impugned order represents
a determination of maintainability based on the absence
of jurisdictional facts and cannot be faulted either on
facts or in law.

49. For all the aforesaid reasons, this Court finds no infirmity,
illegality, perversity or jurisdictional error in the order
passed by the National Company Law Tribunal warranting
interference under Articles 226 and 227 of the
Constitution of India. The writ petition is accordingly
liable to be dismissed.

- 26 -
NC: 2026:KHC:26067
WP No. 16159 of 2026

HC-KAR



50. Having regard to the conduct of the Petitioner in invoking
the jurisdiction of the National Company Law Tribunal
without establishing the foundational facts necessary to
maintain an application under Section 94, and thereafter
persisting with the present proceedings despite the
availability of an efficacious statutory appellate remedy,
this Court is of the considered view that the matter
warrants imposition of exemplary costs.

51. Accordingly, the writ petition stands dismissed with
costs quantified at ₹1,00,000/- (Rupees One Lakh only).
The said amount shall be deposited by the Petitioner with
the Karnataka State Legal Services Authority within a
period of four weeks from today. In the event the amount
is not deposited within the stipulated period, the
Karnataka State Legal Services Authority shall be entitled
to recover the same in accordance with law as arrears of
land revenue.

SD/-
(SURAJ GOVINDARAJ)
JUDGE




PRS
List No.: 1 Sl No.: 25