NCLT Mumbai: Personal Guarantors Not Entitled to Resolution Plan Details Under Section 60(5) IBC or Rule 11 NCLT Rules
Sangeetha Prathap
The National Company Law Tribunal, Mumbai Bench, has held that personal guarantors of a corporate debtor are not entitled to seek disclosure of the resolution plan or its treatment of guarantees by invoking Section 60(5) of the Insolvency and Bankruptcy Code (IBC) or Rule 11 of the NCLT Rules, 2016. The ruling was delivered by a Bench comprising Justice Sushil Mahadeorao Kochkey (Member–Judicial) and Prabhat Kumar (Member–Technical).
The matter arose in relation to the Corporate Insolvency Resolution Process (CIRP) of Prabhat Technologies (India) Ltd., which had commenced pursuant to a financial creditor’s application under Section 7 of the IBC. After the Committee of Creditors (CoC) approved the resolution plan, it was placed before the adjudicating authority for approval under Section 31 of the Code.
The applicants, who were personal guarantors for loans extended by the erstwhile State Bank of Bikaner & Jaipur (now merged with SBI), sought directions under Section 60(5) read with Rule 11 of the NCLT Rules to compel the Resolution Professional (RP) and SBI to disclose critical information. Specifically, they requested details regarding how the resolution plan treats personal guarantees and the status of their loan liability.
The personal guarantors submitted that they had repeatedly approached both the Resolution Professional and the corporate debtor to obtain the information but were unsuccessful. They contended that the Tribunal should exercise its inherent powers to direct disclosure, arguing that transparency was essential given their exposure to liability.
Opposing the plea, the Resolution Professional and SBI asserted that the IBC does not mandate disclosure of the contents of a resolution plan to anyone other than CoC members and the suspended Board of Directors. They emphasized that guarantors do not have a statutory right to access confidential information forming part of the resolution plan.
The Tribunal agreed with the respondents, observing that the IBC contains no provision that requires the sharing of the resolution plan with personal guarantors. It further held that Section 60(5) cannot be invoked to create rights not contemplated under the Code. The Bench relied on the Supreme Court’s ruling in Glas Trust Company LLC v. Buju Raveendran (Civil Appeal No. 9986 of 2024), which clarified that inherent powers under Rule 11 can only be used in the absence of express statutory provisions and cannot be invoked to override them.
The Tribunal emphasized that Section 60(5) permits adjudication only of disputes that “arise out of” or “relate to” the insolvency of the corporate debtor. A personal guarantor’s demand to access the resolution plan does not fall within the categories contemplated under the provision. Therefore, such an application cannot be maintained under the residuary jurisdiction of the NCLT. Finally, the Tribunal held that Rule 11 of the NCLT Rules—which grants inherent powers—cannot be invoked to sidestep clear statutory limits under the IBC. Since the Code expressly restricts access to the resolution plan, the Tribunal concluded that no exceptional circumstance existed to warrant the exercise of inherent jurisdiction.
The application was accordingly dismissed, reaffirming that personal guarantors have no right to demand disclosure of resolution plan details prior to approval under Section 31 of the IBC.
Cause Title: Paramount Consultant & Corporate Advisors Pvt. Ltd. v. Prabhat Telecom India Ltd.
Case No: IA (I.B.C)/3132 (MB) 2025 In C.P. (IB)/1874 (MB) 2019
Coram: Justice Sushil Mahadeorao Kochkey (Member-Judicial), Prabhat Kumar (Member-Technical)
