The Chennai Bench of the National Company Law Tribunal (NCLT) has ruled that foreign companies incorporated outside India do not qualify as ‘corporate persons’ under Section 3(7) of the IBC, and that Section 60(1) anchors NCLT jurisdiction strictly to the registered office of the Corporate Debtor within India. The Bench therefore dismissed PNB’s petition under Section 95 of the IBC against Reji Abraham, the Personal Guarantor for foreign currency loan and SBLC facilities aggregating to USD 128 Million extended to four Aban Group entities incorporated in Singapore and Norway, holding that the Bench lacked territorial jurisdiction since none of the principal borrowers had a registered office in India.
The Tribunal explained that foreign companies, though recognised for limited regulatory purposes under Chapter XXII of the Companies Act, 2013, do not become ‘companies’ within the meaning of Section 2(20) and cannot be brought within the fold of Section 3(7) of the IBC without express statutory inclusion, and the residuary limb ‘any other person incorporated with limited liability under any law for the time being in force’ must be read as referring only to Indian law.
The Bench reaffirmed the Supreme Court’s position in GVK Industries v. Income Tax Officer [(2011) 4 SCC 36], that Parliament is presumed to legislate only for India unless a contrary intention clearly appears, and held that the IBC, being a domestic legislation of limited territorial reach, confers no extra-territorial jurisdiction upon the Adjudicating Authority to adjudicate obligations arising from entities situated beyond India’s sovereign and statutory framework.
Further, Section 60(1) of the IBC is the governing provision for territorial jurisdiction in personal guarantor insolvency proceedings, and that the place of residence of the Personal Guarantor, the cause of action, or the governing law of the guarantee cannot confer jurisdiction on an NCLT Bench where the Corporate Debtor has no registered office within its territorial limits, since Section 179 is expressly subject to Section 60, added the Tribunal.
While acknowledging the settled legal position that a creditor may proceed against the Personal Guarantor independently of any CIRP against the Corporate Debtor and that the guarantor’s liability is co-extensive under Section 128 of the Indian Contract Act, the Bench clarified that this right is available only where the registered office of the Corporate Debtor falls within the territorial jurisdiction of the adjudicating NCLT Bench.
The Division Bench comprising Sanjiv Jain (Judicial Member) and Venkataraman Subramaniam (Technical Member) observed that the statutory scheme under Section 60(1) of the IBC anchors the territorial jurisdiction of the Adjudicating Authority, for insolvency resolution and liquidation of corporate persons including corporate debtors and personal guarantors, to the NCLT having territorial jurisdiction over the place where the registered office of the corporate person is located.
The Bench noted that the definition of ‘corporate person’ under Section 3(7) of the IBC, read with Section 2(20) of the Companies Act, 2013, confines the expression ‘company’ to one incorporated under the Companies Act or any previous Indian company law, and that the residuary limb ‘any other person incorporated with limited liability under any law for the time being in force’ must, following the decision in Susanta Mukherjee v. Union of India [1975 SCC OnLine Cal 158], be read as referring only to Indian law and not to the laws of any foreign country.
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The Tribunal placed reliance on the Supreme Court’s decision in GVK Industries Ltd. v. Income Tax Officer [(2011) 4 SCC 36], observing that Parliament is ordinarily presumed to legislate only for India unless a contrary intention clearly appears, and that no such contrary intention was discernible from Section 3(7) of the IBC. The Bench further noted that a foreign company, though recognised for limited regulatory purposes under Chapter XXII of the Companies Act, does not become a ‘company’ within the meaning of Section 2(20) and cannot be brought within the fold of Section 3(7) without express inclusion.
The Tribunal acknowledged the settled legal position that a creditor may proceed against the Personal Guarantor even in the absence of CIRP or liquidation proceedings against the Corporate Debtor, and that the liability of the Personal Guarantor is co-extensive with that of the principal borrower under Section 128 of the Indian Contract Act. However, it clarified that this right is subject to the statutory requirement that the registered office of the Corporate Debtor must lie within the territorial jurisdiction of the NCLT where the Section 95 application is filed.
The Bench further observed that Section 179 of the IBC, which deals with the territorial jurisdiction of the Adjudicating Authority over individuals by reference to the place of residence or business, is expressly made subject to Section 60, and therefore cannot be invoked to confer jurisdiction on the NCLT Chennai Bench merely because the Personal Guarantor resides in Chennai.
Briefly, the Punjab National Bank (PNB), through its Stressed Asset Management Branch, Chennai, sought initiation of the insolvency resolution process against Reji Abraham, the Personal Guarantor. The Personal Guarantee was furnished by Reji Abraham vide Deed of Guarantee and extended through a Letter of Continuing-cum-Undertaking, capping his liability at USD 128 Million, in respect of credit facilities availed by four foreign entities of the Aban Group, under a consortium arrangement aggregating to USD 2,130 million, along with separate foreign currency loan and SBLC facilities.
The Bank issued a demand notice in Form-B on Jan 08, 2026, claiming a default of Rs. 896 Crores with the date of default stated as Jan 07, 2026. The Bank also invoked the personal guarantee vide letter dated June 30, 2018, and relied on an OTS offer letter dated Jan 06, 2023, from Aban Holdings Pte. Ltd. as a further acknowledgement of subsisting debt.
The Respondent/Personal Guarantor raised a preliminary objection on maintainability, contending that all the principal borrowers are foreign entities incorporated and registered outside India (Singapore and Norway), with no registered office within the territorial jurisdiction of the NCLT Chennai Bench, and that the IBC, being a domestic legislation of limited territorial reach, could not be invoked against him in the absence of any Indian-jurisdiction Corporate Debtor.
