2021 (3) TMI 1351 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors - existence of debt and dispute or not - HELD THAT - It is seen from Part - III at SI. No. 13 of the Application that the Personal Guarantor has executed the Deed of Guarantees dated 31.08.2005, 29.12.2009 19.12.2013 and the said Deed of guarantees is enclosed along with the typed set filed along with the Application - the Demand Notice which was issued under Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 to the Personal Guarantor on 22.10.2020 is also placed on record. The Learned Counsel for the Applicant had filed rejoinder to the Counter wherein the Applicant refuted the allegations made by the Guarantor and stated that the personal guarantor is projecting the case of the borrower company and raised several pleas available to the borrower which is not maintainable. In this case, the borrower's liability has been adjudicated and he is made liable. In addition to that, the Personal Guarantor has not preferred any appeal against the decree passed by Hon'ble DRT and the said decree has become final. Further, the CIRP proceedings against the said Corporate Debtor is pending in IBA/624/2019 before this Tribunal. Hence, the Applicant is seeking to admit this application as per the facts stated in the application. All the defences raised by the Corporate Debtor will be considered at the time when the RP files his report under Section 99 of IBC, 2016 and when the matter is taken up for admission or rejection under Section 100 of IBC, 2016. Application admitted.

Summary

Issues:
1. Application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 against Personal Guarantors of a Corporate Debtor under CIRP.
2. Maintainability of the application against the Personal Guarantors.
3. Defences raised by the Corporate Debtor and the response to these defences.
4. Appointment of Interim Resolution Professional and further proceedings.

Analysis:
1. The judgment pertains to an application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 against the Personal Guarantors of a Corporate Debtor undergoing Corporate Insolvency Resolution Process (CIRP). The application was filed by the State Bank of India against the Personal Guarantors of Coastal Energy Private Limited, the Corporate Debtor.

2. The Respondent, a Personal Guarantor, challenged the maintainability of the application, arguing that it was premature as it arose from an order dated 08.03.2019 from DRT-I. The Respondent contended that the application should be dismissed as the sale proceeds of the Schedule Properties were deemed insufficient to cover the amount due to the Applicant, making the Respondent personally liable. However, the Applicant refuted these claims, stating that the Personal Guarantor was projecting the case of the borrower company and that the borrower's liability had been adjudicated.

3. The defences raised by the Corporate Debtor will be considered at a later stage when the Resolution Professional files their report under Section 99 of the IBC, 2016. The Applicant argued that the Personal Guarantor had not appealed against the decree passed by DRT, which had become final. The CIRP proceedings against the Corporate Debtor were also pending before the Tribunal.

4. The Tribunal, citing a judgment by NCLAT, appointed an Interim Resolution Professional and directed the Financial Creditor to serve a copy of the application to the Interim Resolution Professional for preparing a report under Section 99 of the IBC, 2016. The Resolution Professional was tasked with examining the application and providing a recommendation for its acceptance or rejection within a specified period. The matter was scheduled for further proceedings on a specific date for the filing of the Interim Resolution Professional's report.