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2021 (3) TMI 1246 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Personal Guarantor/Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - The Applicant has clearly brought out in its application annexed with documents that the Personal guarantor/Debtor has committed default in making repayment of the loan along with the interest to the Applicant, for which he has given the personal guarantee to the Applicant on behalf of the Corporate Debtor. The application is admitted - moratorium declared.
Issues:
1. Application for initiating the Insolvency Resolution Process against a Personal Guarantor. 2. Failure of the Corporate Debtor to repay the loan leading to NPA declaration. 3. Compliance with legal procedures for initiating the Insolvency Resolution Process. 4. Appointment of Resolution Professional and his powers and responsibilities. Issue 1: Application for initiating the Insolvency Resolution Process against a Personal Guarantor The Tribunal considered an Application by M/s. Siemens Financial Services Pvt. Ltd. to initiate the Insolvency Resolution Process against Mr. Vinod Sehwag, the Personal Guarantor of a Corporate Debtor, M/s. Xalta Food & Beverages Private Limited. The Applicant emphasized that Mr. Sehwag executed a Personal Guarantee, ensuring payment of amounts due by the Corporate Debtor to the Applicant. The Applicant had sent a Notice demanding payment, and it was established that the Personal Guarantor had defaulted on the loan repayment. Issue 2: Failure of the Corporate Debtor to repay the loan leading to NPA declaration The Applicant detailed that the Corporate Debtor failed to repay the loan, resulting in the account being declared as a Non-Performing Asset (NPA) on a specific date. Legal proceedings had been initiated against the Corporate Debtor previously, highlighting the financial default that led to the current Application for insolvency against the Personal Guarantor. Issue 3: Compliance with legal procedures for initiating the Insolvency Resolution Process The Applicant complied with legal requirements by filing necessary documents, including a claim before the Resolution Professional of the Corporate Debtor. The Tribunal noted that the interim-moratorium period would be in effect, prohibiting legal actions related to the debts of the Personal Guarantor during this period. The Appointment of a Resolution Professional was made, and the Applicant's proposed professional was accepted, ensuring compliance with the Insolvency and Bankruptcy Code. Issue 4: Appointment of Resolution Professional and his powers and responsibilities Mr. Amit Ojha was appointed as the Resolution Professional, with the Tribunal outlining his powers and responsibilities as per the Insolvency and Bankruptcy Code. The Resolution Professional was directed to examine the Application, provide recommendations for acceptance or rejection, and share a report with the Applicant promptly. The Tribunal directed the parties to serve the Order and related documents on the Resolution Professional for information and compliance, setting a future date for further proceedings. This judgment underscores the legal process involved in initiating insolvency proceedings against a Personal Guarantor due to the default of a Corporate Debtor, ensuring compliance with the relevant laws and appointing a Resolution Professional to oversee the resolution process effectively.
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