2022 (6) TMI 498 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors of the Corporate Debtor - amicable settlement arrived at between parties for repayment - HELD THAT - This is a fit case for admission and proceed against the Personal Guarantors/ Respondents and initiate Corporate Insolvency Resolution Process. It is also seen from the report of Resolution Professional that he has not recommended for negotiation between the parties for arriving at an amicable settlement for repayment. Invoking Section 100 of IBC, 2016, the petition filed under the provisions of Section 95 of IBC, 2016 is admitted and the Insolvency Resolution Process against the Respondents/Personal Guarantors is initiated and moratorium in relation to all the debts is declared, from today i.e. date of admission of the application and shall cease to have effect at the end of the period of 180 days, or this Tribunal passes the order on the repayment plan under Section 114, whichever is earlier, as provided under Sec 101 of IBC, 2016 - application allowed.

Issues Involved:
1. Validity of the creditor's claim based on the deed of guarantee.
2. Admissibility of the insolvency resolution process against personal guarantors.
3. Compliance with procedural requirements under the Insolvency and Bankruptcy Code, 2016 (IBC).

Detailed Analysis:

1. Validity of the Creditor's Claim Based on the Deed of Guarantee:
The respondents argued that the creditor's claim based on the deed of guarantee is not sustainable under law and that the petitioners are not entitled to enforce the alleged guarantee. They contended that the estimated realizable value of the mortgaged properties is Rs. 21.20 crore, which exceeds the total claim admitted by the Resolution Professional against the Corporate Debtor. The respondents alleged that the application was filed to harass them and for illegal enrichment.

2. Admissibility of the Insolvency Resolution Process Against Personal Guarantors:
The petitions were filed by the State Bank of India under Section 95(1) of the Insolvency and Bankruptcy Code, 2016, against personal guarantors of the Corporate Debtor, M/s. Orma Marble Palace Private Limited. The Corporate Debtor is undergoing Corporate Insolvency Resolution Process (CIRP) as per the Tribunal's order dated 09.04.2021. The Tribunal reviewed the documents and reports submitted by the Resolution Professional and found that the debt remained unpaid despite the demand notice issued by the petitioner. The Tribunal admitted the petitions and initiated the Insolvency Resolution Process against the personal guarantors, invoking Section 100 of the IBC, 2016.

3. Compliance with Procedural Requirements Under the IBC:
The Resolution Professional verified the compliance with procedural requirements under Sections 95(4), 95(5), and 95(6) of the IBC. The application was accompanied by requisite documents, demand notices, statements of accounts, and proof of service. The Tribunal directed the Resolution Professional to publish a public notice inviting claims from all creditors and to prepare a list of creditors. The debtor was instructed to prepare a repayment plan in consultation with the Resolution Professional. The meeting of creditors, if required, would be conducted as per Sections 108 to 111 of the IBC, and the Resolution Professional would submit periodic reports to the Tribunal.

Findings:
The Tribunal, after hearing both parties and reviewing the Resolution Professional's report, found it appropriate to admit the petitions and initiate the Insolvency Resolution Process against the personal guarantors. The moratorium was declared, staying any pending legal actions or proceedings related to the debt, and restricting the debtor from transferring or disposing of any assets. The Resolution Professional was directed to publish notices, prepare a list of creditors, and submit a repayment plan within specified timelines. The Tribunal emphasized that the Resolution Professional must comply with the Code of Conduct under Section 208 of the IBC, 2016.

Conclusion:
The Tribunal admitted the petitions filed by the State Bank of India against the personal guarantors of the Corporate Debtor and initiated the Insolvency Resolution Process. The moratorium was declared, and the Resolution Professional was instructed to proceed with the necessary steps as per the IBC, 2016. The Tribunal's order ensures that the insolvency process is conducted in a structured and compliant manner, providing a framework for resolving the outstanding debts.

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