The personal insolvency regime under the Insolvency and Bankruptcy Code, 2016 is an underdeveloped but critical part of India’s insolvency framework. In contrast to the insolvency resolution and liquidation process for corporate debtors which has generated a substantial body of jurisprudence, the provisions governing the personal insolvency resolution process (“PIRP”), which, to date, have only been notified for personal guarantors of corporate debtors, remain relatively untested. This is, however, now changing as the growing volume of insolvency cases involving personal guarantors in the last few years has brought to light several fault lines in the conduct and implementation of the PIRP. A recent judgment of the National Company Law Tribunal, New Delhi (“NCLT”) in Indiabulls Housing Finance Limited v. Dr. Subhash Chandra, pronounced on August 25, 2026 (“Judgement”), brings many of these challenges into focus. The Judgment, which also represents a rare instance where the NCLT was unable to come to a conclusive decision (owing to differing opinions among the members of the bench), has now been referred to a five-judge bench of the NCLT, whose decision is awaited. This note analyzes the key issues arising from the Judgement and examines their broader implications for the evolving personal guarantor insolvency regime in India.
