2022 (7) TMI 144 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtor - accounts classified as NPA - existence of debt and dispute or not - HELD THAT - The personal guarantor, viz., Mr. Shankar Lall Ajitsaria, had executed personal guarantee 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 PFAPL in respect of the Facility Agreements. The Applicant has issued a Demand Notice in Form B on 19/10/2020 under Rule 7(1) of the IB Rules, 2019 demanding Rs.62,59,94,939.27 along with unapplied interest, other charges and costs till repayment in full. In this factual conspectus, the applicant prays for initiation of insolvency resolution process, against the respondent/personal 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. Petition admitted - moratorium declared.

Summary

Issues:
Initiating Insolvency Resolution Process against a Personal Guarantor under the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. The Tribunal considered 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 for a Corporate Debtor, demanding a total debt of Rs.16,89,01,410.32.

2. The Applicant, a body corporate, extended credit facilities to the Corporate Debtor based on representations made by them. The Corporate Debtor and the Personal Guarantor failed to make payments as per the agreed terms, leading to the classification of loan accounts as NPA. The Corporate Debtor was admitted under CIRP, and a Resolution Plan was approved.

3. The Personal Guarantor had executed a personal guarantee in favor of the Applicant to secure repayment of the credit facilities. A demand notice was issued under the IB Rules, 2019, demanding payment along with interest and charges.

4. The Applicant sought the initiation of the insolvency resolution process against the Personal Guarantor, triggering the interim-moratorium under the IBC, 2016.

5. The Tribunal appointed an Insolvency Professional as Resolution Professional and directed them to file a declaration confirming eligibility. The Resolution Professional was tasked with making recommendations on the application within the specified timeline.

6. The Counsel for the Applicant was directed to serve the order and documents on the Resolution Professional for compliance. The matter was listed for further proceedings, and e-copies of the order were sent to all parties for information.

7. The Tribunal's order, dated June 27, 2022, directed compliance with formalities for the issuance of a certified copy upon request.

This detailed analysis covers the issues involved in the judgment comprehensively, outlining the legal proceedings and decisions made by the Tribunal regarding the initiation of the Insolvency Resolution Process against the Personal Guarantor under the Insolvency and Bankruptcy Code, 2016.