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2022 (4) TMI 568 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtors - 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 Financial Creditor and the Personal Guarantor for arriving at the repayment plan - On 22.03.2022, the Hon'ble Tribunal observed that on 20.01.2022, the Tribunal has granted three weeks' time to the Personal Guarantor for filing his reply, if any, for the report of the RP, failing which, his right to file a reply stands forfeited. In spite of the above order, the Respondent has not chosen to file reply and in the result his right for filing the reply is forfeited. Hence, based on the reasons recorded in the report submitted by the Resolution Professional, the application i.e., CP (IB) No. 76/BB/2021 filed under Section 95 of IBC, 2016 is hereby admitted under Section 100 of the IBC, 2016. The Insolvency Resolution Process is initiated against the Respondent/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. Petition admitted - moratorium declared.
Issues:
1. Application filed by State Bank of India under IBC for Insolvency Resolution Process against Personal Guarantor. 2. Failure of Corporate Debtor to repay credit facilities. 3. Appointment of Resolution Professional and admission of application. 4. Moratorium declaration and initiation of Insolvency Resolution Process. 5. Directions for creditors and preparation of repayment plan. Analysis: 1. The State Bank of India, as the Financial Creditor, filed an Application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against a Personal Guarantor for credit facilities extended to a Corporate Debtor. The Personal Guarantor failed to clear the outstanding liabilities, leading to the application before the Tribunal. 2. The Corporate Debtor, M/s. Sura Leathers Private Limited, defaulted on repayment, resulting in classification as a Non-Performing Asset. Subsequently, an Operational Creditor initiated insolvency proceedings against the Corporate Debtor, which led to liquidation. The Financial Creditor invoked the personal guarantee of the Guarantor through demand notices due to non-repayment by the Corporate Debtor. 3. Upon the presentation of the Application, the Tribunal appointed a Resolution Professional who recommended the admission of the application based on various grounds, including the default by the Personal Guarantor in repayment, registration of debt with an Information Utility, and satisfaction of the Code's requirements. 4. Following the Resolution Professional's report and the lack of response from the Personal Guarantor, the Tribunal admitted the application under Section 100 of the IBC, 2016, initiating the Insolvency Resolution Process against the Personal Guarantor. A moratorium was declared, effective for 180 days, during which legal actions on debts were stayed, and the debtor was restricted from disposing of assets. 5. The Resolution Professional was directed to publish a public notice inviting claims from creditors, prepare a list of creditors, and facilitate the preparation of a repayment plan by the debtor. The process included provisions for creditor meetings, compliance with the Code of Conduct, and periodic reporting to the Tribunal, ensuring adherence to the IBC guidelines throughout the Insolvency Resolution Process.
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