2022 (4) TMI 308 - Tri - Insolvency and Bankruptcy

Liquidation in process - application filed against Personal Guarantors - Section 95(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - 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. The Hon'ble NCLAT, Principal Bench, in the matter of RAVI AJIT KULKARNI, PERSONAL GUARANTOR OF PRATIBHA INDUSTRIES LIMITED AND ORS. VERSUS STATE BANK OF INDIA 2021 (9) TMI 60 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI has held that once an Application under Section 95 of IBC, 2016 is filed, the Adjudicating Authority has to act on it, and following principles of natural justice, give limited notice to Personal Guarantor to appear referring to the Interim Moratorium that has commenced as per terms of Section 96 and subsequently proceed to the next stage of appointing Resolution Professional as per Section 97 read with attendant Rules and Regulations. The Resolution Professional is required to examine the Application as set out in Section 97(6) of IBC, 2016 and after examining the Application, as per Section 97(7) of IBC, 2016 the Resolution Professional may recommend for the acceptance or rejection of the Application in his report, within a period of 10 days as contemplated under Section 99(1) of IBC, 2016 - Post this matter on 26.04.2022 for filing of Report by the Interim Resolution Professional.

Summary

Issues:
1. Application filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 against Personal Guarantors of a Corporate Debtor under Liquidation.
2. Barred by limitation due to discrepancy in the date of default.
3. Appointment of Interim Resolution Professional and further proceedings.

Analysis:

1. The application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 was filed against the Personal Guarantors of a Corporate Debtor under Liquidation. The Corporate Debtor had already undergone the Corporate Insolvency Resolution Process (CIRP) and was subsequently ordered for liquidation. The application was filed by the Central Bank of India, Stressed Asset Management Branch, against the Personal Guarantors, seeking to initiate proceedings against them.

2. The Respondent raised a defense claiming that the application was barred by limitation due to discrepancies in the date of default. The Respondent argued that the Applicant incorrectly stated the date of default as 27.06.2019, relying on a Recovery Certificate issued by the Presiding Officer of DRT - 2 Chennai. The Respondent contended that if the date of default is considered as the date when the assets of the Corporate Debtor were declared as Non-Performing Assets (NPA) on 10.09.2013, then the application would be time-barred.

3. The Tribunal considered the arguments presented by both parties and referred to a judgment by the Hon'ble NCLAT in a similar matter. Following the principles outlined in the judgment, the Tribunal appointed an Interim Resolution Professional to oversee the case. Mr. Chandrasekhar Sagutoor was appointed as the Interim Resolution Professional, and the Financial Creditor was directed 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 timeframe. The matter was scheduled for further proceedings on a specific date for the filing of the Resolution Professional's report.