2022 (7) TMI 770 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantor to Corporate Debtor - time limitation - existence of debt and dispute or not - HELD THAT - The Resolution Professional has stated that the application filed by the Financial Creditor is within limitation as Hon'ble Supreme Court (in suo moto writ petition 3/2020) vide order dated 10.01.2022 has excluded the period from 15.03.2020 till 28.02.2022 for the purposes of limitation - Contention of the Guarantor that the sum of Principal Amount claimed by the applicant is incorrect, since the Bank Statement of the loan account attached at Annexure P-32 Page 372 of the petition deputes about Rs. 45.67 crores, whereas the amount mentioned in the Part-III (page 24 of the petition) claims Principal amount is about Rs. 52.05 crores. The contention of the Guarantor is incorrect as the amount mentioned in the Bank Statement is calculated upto 03.03.2018, whereas the amount mentioned in the Part-III of the petition is calculated as on 10.09.2021. The application is hereby admitted under Section 100 of the IB Code, 2016 - The Insolvency Resolution Process is initiated against the Respondent/Guarantor and the moratorium is declared, which begins with the date of admission of the application and shall cease to have effect at the end of the period of the 180 days.

Summary

Issues:
Application for Insolvency Resolution Process against Personal Guarantor to Corporate Debtor.

Analysis:
1. The application was filed by State Bank of India under Section 95 r/w. Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantor to Corporate Debtor) Rules, 2019, seeking initiation of the Insolvency Resolution Process against the Personal Guarantor who stood for the outstanding debt of the Corporate Debtor.

2. The Tribunal appointed a Resolution Professional to file a report under Section 99 of the Code, which was duly submitted by the Resolution Professional.

3. State Bank of India submitted that the Corporate Debtor failed to maintain financial discipline, leading to classification as Non-Performing Assets, and issued a legal Demand Notice to the Principal Borrower and Guarantors for repayment of the outstanding amount.

4. The Guarantor raised objections, including lack of Privity of contract with the Bank, time-barred demand notice, and discrepancies in the outstanding debt amount claimed.

5. The Resolution Professional recommended admission of the application under Section 95 of IBC, citing default in repayment by the Guarantor and satisfaction of the statutory requirements.

6. The Tribunal admitted the application, initiating the Insolvency Resolution Process against the Guarantor, declaring a moratorium, and directing the Resolution Professional to publish a public notice for creditors to register their claims within the specified timeline.

7. The Resolution Professional was directed to prepare a report on the repayment plan with details for the creditors and the debtor, ensuring compliance with the Code of conduct.

This detailed analysis covers the legal proceedings and key points of the judgment delivered by the National Company Law Tribunal, Principal Bench, New Delhi.