2022 (5) TMI 398 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Personal Guarantors to Corporate Debtor failed to make repayment of its dues - Financial Creditors - HELD THAT - The personal guarantor viz Smt. Niharika Devi Dinodiya, has executed personal guarantee from time to time, lastly on 31/03/2013 in favour of the Applicant to secure the repayment of the principal amount of the Credit Facilities together with all interest, additional interest, liquidated damages, premium on repayments, reimbursement of all costs, charges and expenses and all other obligations payable by ROTL in respect of the Facility Agreements. The Applicant has issued a Demand Notice in Form B on 06/07/2021 under Rule 7(1) of the IB Rules, 2019. However, the respondent-Personal Guarantor has not paid the amount recalled by the applicant/Financial Creditor as set out in the demand notice dated 06/07/2021 - In this factual conspectus, the applicant prays for initiation of insolvency resolution process, against the respondent/guarantor. It is made known to everyone that on filing this Application by the Applicant/Creditor the interim-moratorium commences in terms of section 96(1)(a) of IBC, 2016 - Application admitted - moratorium declared.

Summary

Issues: Application for initiating the Insolvency Resolution Process against a personal guarantor under the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. Background and Application: The case involves an Application filed under section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against a personal guarantor, Smt. Niharika Devi Dinodiya, for Rythem Overseas Trade Limited. The Applicant, a banking company, extended credit facilities to the principal borrower, ROTL, which failed to repay, leading to classification as NPA.

2. Legal Proceedings: The Applicant previously filed an original application against the guarantors before the Debts Recovery Tribunal-I, Kolkata. Additionally, the Corporate Debtor, ROTL, was admitted under Corporate Insolvency Resolution Process (CIRP) and later ordered for liquidation. The personal guarantor executed guarantees to secure repayment, but failed to comply with the demand notice issued by the Applicant.

3. Initiation of Insolvency Process: The Applicant sought initiation of insolvency resolution process against the personal guarantor, invoking the provisions of the Insolvency and Bankruptcy Code, 2016. The filing of the Application triggered an interim-moratorium under section 96(1)(a) of the IBC, 2016, providing protection to the Applicant.

4. Appointment of Resolution Professional: The Applicant proposed the appointment of an Insolvency Professional, Mr. Neeraj Kumar Sureka, as the Resolution Professional. The Tribunal appointed Mr. Sureka as the Resolution Professional, directing him to fulfill all requirements and exercise powers under section 99 of the IBC, 2016.

5. Further Directions: The Resolution Professional was instructed to make recommendations on the Application within the stipulated time and provide a copy of the report to the Applicant and the Adjudicating Authority. The Applicant's Counsel was directed to serve the Order and documents on the Resolution Professional, with proof of service to be filed. The matter was listed for a future date, and e-copies of the Order were to be sent to all parties and their Counsel.

This comprehensive analysis outlines the legal judgment issued by the National Company Law Tribunal, Kolkata Bench, regarding the initiation of insolvency proceedings against a personal guarantor under the Insolvency and Bankruptcy Code, 2016.