2022 (7) TMI 984 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtor - Financial Creditors - existence of debt and dispute or not - HELD THAT - From the report, there does not appear to be any request of the Resolution Professional for issuance of the instructions for the purpose of conducting negotiations between the debtor and creditors for arriving at the repayment plan. Therefore, based on the reasons recorded in the report submitted by the Resolution Professional, the application, i.e., CP(IB)/262(KB)2021 filed under the provisions of section 95 of the IBC, 2016 is hereby admitted under section 100 of the IBC, 2016. The Insolvency Resolution Process is initiated against the respondent 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 180 days, as provided u/s. 101 of IBC, 2016 or until this Adjudicating Authority approves the repayment plan under sub-section (1) of section 114 of the Code. The Resolution Professional in exercise of the powers conferred u/s. 104 of the IBC, 2016 shall prepare a list of creditors within thirty days from the date of the notice. The personal guarantor shall prepare a repayment plan in consultation with the Resolution Professional as provided u/s. 105 of the IBC, 2016, which shall include the provisions for payment of fee to the Resolution Professional - In case the Resolution Professional recommends that a meeting of the creditors is not required to be summoned, he shall record the reasons therefor. If the Resolution Professional is of the opinion that the meeting of the creditors should be summoned, he shall specify the details as provided u/s. 106(3) of the IBC, 2016. The date of meeting should not be less than 14 days or more than 28 days from the date of submission of the Report under sub-section (1) of section 106 of the IBC, 2016, for which at least 14 days notice to the creditors, as per the list prepared, shall be issued by all modes. Such notice must contain the details as provided under the provisions of section 107 of the IBC, 2016. The meeting of the creditors shall be conducted in accordance with sections 108, 109, 110 and 111 of the IBC, 2016. The Resolution Professional shall prepare a report of the meeting of the creditors on repayment plan with all details as provided under section 112 of the IBC, 2016 and submit the same to this Adjudicating Authority, copies of which shall be provided to the personal Guarantor and the Creditors as per section 113 of the IBC, 2016. It is made clear that the Resolution Professional shall perform his functions and duties in compliance with the Code of Conduct provided u/s. 208 of the IBC, 2016. Petition admitted - moratorium declared.

Summary

Issues involved: Application for initiation of Insolvency Resolution Process against a Personal Guarantor under the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. Application for Insolvency Resolution Process: The Tribunal considered an application filed under sections 95(1), 96, 97, 99, and 100 of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) to initiate the Insolvency Resolution Process against a Director who is a Personal Guarantor of a Corporate Debtor. The application was accompanied by necessary details and documents as per the provisions of the Code.

2. Appointment of Resolution Professional: The Adjudicating Authority appointed a Resolution Professional to file a report under section 99 of the IBC, 2016. The Resolution Professional recommended the admission of the application based on the debts owed, failure to repay, and compliance with statutory requirements. The report highlighted the non-repayment of debts by the Personal Guarantor and the satisfaction of conditions under the IBC.

3. Admission of Application: Following the report submitted by the Resolution Professional, the Tribunal admitted the application under section 100 of the IBC, 2016. The initiation of the Insolvency Resolution Process against the Personal Guarantor was approved, declaring a moratorium period and staying legal actions related to debts owed by the guarantor.

4. Further Procedures: The Resolution Professional was directed to publish a public notice inviting claims from creditors. The timeline for submitting claims and preparing a repayment plan was specified, along with the process for conducting meetings of creditors if required. The Resolution Professional's responsibilities, including compliance with the Code of Conduct, were outlined for the successful resolution of the insolvency process.

5. Conclusion: The Tribunal's order dated July 15, 2022, admitted the application for Insolvency Resolution Process against the Personal Guarantor, initiating a structured process for debt recovery and resolution. The procedural steps outlined in the order aim to facilitate the efficient handling of creditor claims and the formulation of a repayment plan in accordance with the IBC, 2016.