# Pankaj Chhabildas Sheth vs. Abhyudaya Co-Operative Bank Ltd.

> NCLAT judgment dated 2026-09-07. Citation: TCN-2026-NCLAT-00254. The appellant, Pankaj Chhabildas Sheth, a personal guarantor and director of the corporate…

- **Court:** NCLAT
- **Order date:** 7 Sept 2026
- **Citation:** TCN-2026-NCLAT-00254
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/pankaj-chhabildas-sheth-vs-abhyudaya-co-operative-bank-ltd-r0dja

## Summary

### Background

The appellant, Pankaj Chhabildas Sheth, a personal guarantor and director of the corporate debtor M/s Veer Wires Private Limited, challenged an NCLT order dated 11/5/2026. The NCLT had dismissed his petition filed under Section 94 of the Insolvency and Bankruptcy Code, 2016 (IBC). The corporate debtor had availed credit facilities from Abhyudaya Co-Operative Bank Ltd. (financial creditor), defaulted, and its accounts were classified as NPA. The financial creditor initiated SARFAESI proceedings and arbitration, leading to an award holding the corporate debtor and guarantors jointly and severally liable. The appellant had previously filed a Section 94 application which was dismissed as withdrawn due to a technicality, and subsequently filed a second Section 94

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## Facts

Pankaj Chhabildas Sheth (appellant) is the personal guarantor of the Corporate Debtor (CD) and a director of M/s Veer Wires Private Limited.

The CD availed credit facilities from Abhyudaya Co-Operative Bank Limited (financial creditor).

The financial creditor sanctioned term loan facilities (TL1, TL2, TL3) amounting to ₹18,90,000/-, ₹5,50,000/-, and ₹24,00,000/- on 04/01/2020.

The appellant executed a personal guarantee deed on 31/1/2020, undertaking joint and several liabilities.

The CD subsequently availed an additional cash credit facility of ₹3,50,000,00/- on 02/03/2021.

The CD failed to discharge its financial obligations, and its loan accounts were classified as a Non-Performing Asset (NPA) on 31/7/2021.

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in dismissing the appellant's Section 94 IBC …

**Ratio:** An application under Section 94 of the IBC by a personal guarantor is intended for

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**Reasoning:** The Adjudicating Authority and subsequently the NCLAT found that the appellant's Section

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**Interpretation:** Section 94 of the IBC is interpreted as a mechanism for personal guarantors

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**Application:** In this case, the appellant's actions of filing Section 94 applications

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## Parties

- **Judges:** Mohd. Faiz Alam…; Naresh Sa…
- **Appellants:** Pankaj Chhabildas…
- **Respondents:** M/s Veer Wires…; Abhyudaya…
- **Other parties:** Kamal Kumar…
- **Advocates:** Eshna K…; Sabari Kiru…; +1 more

## Timeline

- **2020-01-04 — Term Loan San…**: Financial creditor sanctioned term loan facilities (TL1, TL2, TL3) amounting to…
- **2020-01-31 — Personal Guarantee…**: Appellant executed a personal guarantee…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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