2022 (7) TMI 1068 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtor - existence of debt and dispute or not - HELD THAT - The Principal Borrower AGEPL and guarantor had approached the applicant seeking grant of various Credit Facilities. On the representations made by the AGEPL , the Applicant had extended various Credit facilities from time to time for its business purpose. As per the Credit Facilities, AGEPL was obliged to repay the principal sum of Credit along with interest thereon in accordance with repayment schedule as set out in the agreements - For the Credit facilities, Deed of Guarantee was executed by the respondent-personal guarantor towards security for due repayment of the loans and advances granted to principal debtor with interest, cost and expenses from time to time. The AGEPL and the respondent/personal guarantor had failed and/or neglected to make payment as per terms of the said Agreements. That due to failure of the Corporate Debtor to comply the terms and conditions of the loan accounts, the said loan accounts have been classified as NPA as per the guidelines of RBI. The personal guarantor, viz., Mr. Pratyush Kumar Sureka, had executed several personal guarantees lastly on 22.10.2013 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 AGEPL in respect of the Facility Agreements. The Applicant on 15.07.2021 has issued a Demand Notice in Form B under Rule 7(1) of the IB Rules, 2019 demanding Rs. 25,05,78,059.60/- along with unapplied interest, other charges and costs till repayment in full. 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. List this matter on 16.08.2022.

Summary

Issues Involved:
Initiation of insolvency resolution process against a personal guarantor under the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:
1. Application for Insolvency Resolution Process: 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. The total debt demanded was Rs. 25,05,78,059.60.

2. Background and Loan Defaults: The applicant, a banking body corporate, extended credit facilities to the principal borrower, who failed to repay the loans, leading to the classification of loan accounts as Non-Performing Assets (NPAs) as per RBI guidelines. The personal guarantor had executed guarantees to secure repayment obligations.

3. Legal Proceedings: Legal proceedings had been initiated earlier against the corporate debtor and guarantors, including the personal guarantor. The corporate debtor was admitted under Corporate Insolvency Resolution Process (CIRP) by the National Company Law Tribunal, and a resolution plan was subsequently approved.

4. Demand Notice and Insolvency Application: The personal guarantor had executed guarantees in favor of the applicant, and a demand notice was issued demanding the outstanding amount. The applicant sought the initiation of the insolvency resolution process against the personal guarantor.

5. Appointment of Resolution Professional: The Tribunal appointed an Insolvency Professional as the Resolution Professional and directed the professional to fulfill all requirements for the appointment. The Resolution Professional was tasked with making recommendations on the application within the specified time frame.

6. Direction for Compliance: The counsel for the applicant was directed to serve the order and relevant documents on the Resolution Professional for compliance. The matter was listed for further proceedings, and the Registry was instructed to provide copies of the order to all parties involved.

This detailed analysis covers the key aspects of the judgment, including the application for insolvency resolution, loan defaults, legal proceedings, appointment of the Resolution Professional, and directions for compliance and further steps in the process.