# Mukesh Kumar vs. M/s Baba Shri Chand Alloys & Ors.

> NCLAT judgment dated 2026-07-07. Citation: TCN-2026-NCLAT-00228. The appellant, Mukesh Kumar, filed a petition under Section 94 of the Insolvency & Bankruptcy…

- **Court:** NCLAT
- **Order date:** 7 Jul 2026
- **Citation:** TCN-2026-NCLAT-00228
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mukesh-kumar-vs-ms-baba-shri-chand-alloys-ors-1728c

## Summary

### Background

The appellant, Mukesh Kumar, filed a petition under Section 94 of the Insolvency & Bankruptcy Code, 2016 (IBC) to initiate personal insolvency proceedings, stating an inability to perform a guarantee value of Rs. 5 lakhs. The Adjudicating Authority dismissed this petition via an order dated 17.04.2026, primarily on the grounds that the amount of default (Rs. 5 lakhs) was below the threshold limit prescribed under Section 4 of the IBC.

## Facts

Mukesh Kumar (appellant) filed a petition under Section 94 of the Insolvency & Bankruptcy Code, 2016 (IBC) for personal insolvency.

The appellant was unable to perform his guarantee value of Rs. 5 lakhs.

The Adjudicating Authority dismissed the petition via an Order dated 17.04.2026.

The dismissal was based on the ground that the default amount of Rs. 5 lakhs was below the threshold limit prescribed under Section 4 of the IBC.

Section 4 of the IBC comes under Part II, Chapter I, and deals with "Insolvency Resolution and Liquidation for Corporate Persons".

Part III of the IBC, Section 78, deals with fresh start, insolvency, and bankruptcy of individuals and partnership firms.

The threshold limit under Section 78 of the IBC is not less than one thousand rupees.

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority correctly applied the threshold limit under Section 4 of the IBC …

**Ratio:** No, the Adjudicating Authority incorrectly applied the threshold limit under Section 4 of

…

**Reasoning:** Section 4 of the IBC specifically applies to 'Insolvency Resolution and Liquidation for

…

**Interpretation:** The NCLAT interpreted that the different parts of the IBC are distinct in their

…

**Application:** The Adjudicating Authority's dismissal of the appellant's petition based on the

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## Parties

- **Judges:** N. Sesha…; Barun M…
- **Appellants:** MUKESH…
- **Respondents:** M/s Baba Shri…; Bank of B…; +1 more
- **Other parties:** Pulkit…; Ramneet Kua…
- **Advocates:** Pulkit…; Ramneet Kua…

## Timeline

- **2026-04-17 — Adjudicating Authority…**: The Adjudicating Authority dismissed Mukesh…
- **2026-07-07 — NCLAT Or…**: The NCLAT set aside the Adjudicating Authority's order and remanded the matter for…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 94 — Application by debtor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-94)

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