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2022 (4) TMI 11 - Tri - Insolvency and BankruptcyMaintainability 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 - From the report of the Resolution Professional there does not appear any request for issuance of any direction for the purpose of conducting negotiations between the Personal Guarantor and the Financial Creditor for arriving at the repayment plan. Based on the reasons recorded in the report submitted by the Resolution Professional, the application is hereby admitted under Section 100 of the IBC, 2016. The Insolvency Resolution Process is initiated against the Applicant/Personal Guarantor and moratorium is declared in place of interim moratorium, which begins with the date of admission of the application and shall cease to have effect at the end of the period of 180 days, as provided under Sec 101 of IBC 2016. Application admitted - moratorium declared.
Issues: Application for Corporate Insolvency Resolution Process against a Personal Guarantor under IBC, 2016.
Detailed Analysis: 1. Debt and Default: The application sought to initiate Corporate Insolvency Resolution Process against the Personal Guarantor, who guaranteed loans for the Corporate Applicant amounting to ?181,24,67,000. The Corporate Applicant faced financial difficulties after a raid by the GST Department, resulting in defaulting on financial obligations to Indian Bank, Vijaya Bank, and Aditya Birla Finance Limited. 2. Appointment of Resolution Professional: The Tribunal appointed a Resolution Professional, Mr. Madhu Desikan, to handle the case. The Resolution Professional recommended the admission of the application based on various grounds, including the absence of any previous insolvency applications against the Applicant/Debtor. 3. Admission of Application: Following a thorough review of the Resolution Professional's report, the Tribunal admitted the application under Section 100 of the IBC, 2016. The initiation of the Insolvency Resolution Process against the Personal Guarantor was approved, and a moratorium was declared for 180 days from the date of admission. 4. Moratorium Provisions: During the moratorium period, legal actions related to debts were stayed, creditors were prohibited from initiating legal proceedings, and the debtor was restricted from disposing of assets. Certain transactions exempted from the moratorium were to be notified by the Central Government in consultation with financial regulators. 5. Claims Registration and Repayment Plan: The Resolution Professional was directed to publish a public notice inviting claims from creditors and prepare a list of creditors within 30 days. The debtor was required to prepare a repayment plan in consultation with the Resolution Professional, including provisions for the Resolution Professional's fee. 6. Creditor Meeting: The Resolution Professional would determine the necessity of a creditors' meeting and, if required, summon the meeting within a specified timeframe. The meeting details, notice period, and creditor information were to be managed in accordance with the relevant sections of the IBC, 2016. 7. Compliance and Reporting: The Resolution Professional was mandated to comply with the Code of Conduct provided under Section 208 of the IBC, 2016. Periodic reports were to be submitted to the Tribunal as per rules to ensure transparency and accountability throughout the Insolvency Resolution Process. 8. Conclusion: The application for Corporate Insolvency Resolution Process against the Personal Guarantor was admitted, and the necessary procedures for debt resolution and creditor interactions were outlined to facilitate a structured resolution process under the IBC, 2016.
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