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Informist, Thursday, Apr. 2, 2026

 

NEW DELHI – The Chennai bench of the National Company Law Appellate Tribunal Thursday set aside a 2022 order by the Hyderabad bench of the National Company Law Tribunal to admit personal guarantor insolvency proceedings against Deccan Chronicle Holdings Ltd.'s former chairman T.V. Reddy. This means the Hyderabad tribunal's order in 2025 declaring Reddy bankrupt on L&T Finance Ltd.'s plea for dues amounting to INR 756.06 million becomes null and void. Reddy was the personal guarantor for financial facilities provided to Deccan Chronicle by L&T Finance.

 

The appellate tribunal said the default by Reddy was in 2012 and a demand notice was issued in 2020. Issuance of a demand notice after eight years of default would be barred by the statute of limitation and would be bad in the eyes of the law, the appellate tribunal said. "We are of the view that, for making a guarantee to be continuous, it has to flow from the settlement that has been agreed upon between the parties, has to be specific and definite in its term, and should have a binding effect, based upon the terms of the agreement itself, which was not prevailing in the present case," it said.

 

In 2011, L&T Finance had given a term loan of INR 250 million to Deccan Chronicle Holdings. Reddy was personal guarantor for the loan. Following the default by Deccan Chronicle Holdings and an arbitral award in 2013 directing the company and Reddy to jointly and severally pay INR 250.26 million with interest at 15% per annum from 2012, L&T Finance moved the Hyderabad bench of the tribunal in 2021.

 

Meanwhile, in 2017, the tribunal admitted Deccan Chronicle Holdings into insolvency. In 2019, it approved SREI Multiple Assets Investments Trust and Vision India Fund's resolution plan. However, as Reddy's debt was not fully resolved under the insolvency proceedings, L&T Finance issued a notice in 2020 to the personal guarantor demanding payment of the amount.

 

Since no repayment was made, L&T Finance filed a petition to initiate an individual insolvency resolution process against Reddy, which the tribunal admitted in 2022. On Reddy's failure to submit a resolution plan, L&T Finance filed an application to initiate bankruptcy proceedings against him.

 

Thursday, shares of L&T Finance ended 1.8% lower at INR 240.35 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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