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2022 (4) TMI 604 - 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 - Upon perusal of the Documents on record and the Report of the RP, the Bench is of considered view that the Personal Guarantee of the Respondent is continuing in nature. Further, the Respondent has neither disputed the Deed of Guarantee nor denied the outstanding claimed by the Applicant/Financial Creditor. Upon bare perusal of the Report filed by the RP, this Bench has gone through the observations made by the RP with respect to the examination of the Application. The Report of the RP has recommended the admission of the Application filed by the Financial Creditor against the Personal Guarantor. There is Guarantee given by the Personal Guarantor against the default made by the Corporate Debtor for payment of debt amount and the amount of default has been above the threshold limit. Therefore, we do not have any objection on record against the application filed for initiation of IRP against the Personal Guarantor to the Corporate Debtor. The Application is complete and has been filed under the proper form. The debt amount is more than Rupees One Thousand and the default of the Personal Guarantor to the Corporate Debtor has been established. Application admitted - moratorium declared.
Issues:
Company petition under Insolvency & Bankruptcy Code against Personal Guarantor to Corporate Debtor. Analysis: 1. The Company Petition was filed by State Bank of India seeking to initiate Personal Insolvency Resolution Process against the Personal Guarantor under the Insolvency & Bankruptcy Code, 2016. 2. The total outstanding amount claimed by the Applicant was &8377; 8,70,93,55,275/- as on 31.12.2020. 3. The Resolution Professional appointed for the matter issued an intimation to the Personal Guarantor to prove repayment of the debt claimed, as per section 99 of the Code. 4. The Personal Guarantor argued that his liability was extinguished due to the lack of renewal of the Guarantee Agreement during Corporate Debt Restructuring. 5. The RP contended that the Guarantee executed by the Personal Guarantor is continuing in nature and binds the Guarantor irrespective of changes in management or terms of the contract. 6. The Bench observed that the Personal Guarantee is continuing in nature, and the Respondent did not dispute the Deed of Guarantee or the outstanding amount claimed by the Financial Creditor. 7. The Bench found that the debt amount was above the threshold limit, and there were no objections to initiating the Insolvency Resolution Process against the Personal Guarantor. 8. The Application was deemed complete, and the debt amount exceeded Rupees One Thousand, establishing the default of the Personal Guarantor to the Corporate Debtor. Conclusion: The Tribunal admitted the Company Petition filed by State Bank of India under section 95 of the Insolvency & Bankruptcy Code, 2016, seeking to initiate Personal Insolvency Resolution Process against the Personal Guarantor. The moratorium under Section 101 commenced from the date of the order, and the Resolution Professional was directed to carry out the Insolvency Resolution Process. The Registry was instructed to update the Master Data of the Respondent and communicate the order to all relevant parties.
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