9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (10) TMI 706 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantor/Debtor - existence of debt and dispute or not - Section 95(1) read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for IRP for Personal Guarantors to Corporate Debtor) Rules, 2019 - HELD THAT - Rule 3(f) of the Personal Guarantor Rules 2019 (Supra), which defines the term 'Guarantor', nowhere stipulates that the Corporate Debtor shall be under CIR Process or Liquidation. Hence, the Personal Guarantor herein, is deemed to have been covered under the definition of the Guarantor as defined under Rule 3(f) of the Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors Rules, 2019. While going through the Section 60(1), it is seen that the Adjudicating Authority, in relation to the insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof shall be the NCLT having territorial jurisdiction over the place where the registered office of a corporate person is located. Hence, in the case herein, there is a situation where various IB applications for initiation of CIR process against the Corporate Debtor are pending - the moment the IB application in relation to Insolvency resolution of the Corporate Debtor is pending before this Adjudicating Authority, the provisions of Section 60(1) get attracted and the jurisdiction to entertain insolvency process against the personal guarantor would, therefore, lie with the NCLT. Thus, in a situation where Application(s) in relation to the Corporate Debtor for initiation of CIRP is pending at National Company Law Tribunal (NCLT) then, initiation of CIRP of the Corporate Debtor is not a prerequisite for maintainability of an application under Section 95 of the IBC, 2016 filed for initiating IR Process against the Personal Guarantor of that Corporate Debtor before the NCLT - List the matter on 11.10.2021.
Issues Involved:
1. Maintainability of the application under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016. 2. Jurisdiction of the National Company Law Tribunal (NCLT) versus Debt Recovery Tribunal (DRT) for insolvency proceedings against personal guarantors. 3. Interpretation of Sections 60 and 179 of the IBC. 4. Appointment of a Resolution Professional (RP). Issue-wise Detailed Analysis: 1. Maintainability of the Application under Section 95 of the IBC, 2016: The Applicant, PNB Housing Finance Ltd., filed an application under Section 95(1) read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for IRP for Personal Guarantors to Corporate Debtor) Rules, 2019. The application sought to initiate the Insolvency Resolution Process (IR Process) against the Personal Guarantor of the Corporate Debtor, Supertech Ltd. The Corporate Debtor had defaulted on loan repayments, leading to the invocation of the personal guarantee by the Applicant. The Respondent opposed the application, arguing that it was not maintainable under Section 95 read with Section 60(1) & (2) of the IBC, asserting that the appropriate forum should be the DRT, not the NCLT. 2. Jurisdiction of the NCLT versus DRT for Insolvency Proceedings against Personal Guarantors: The Respondent argued that the application was without jurisdiction and not maintainable under Section 95 read with Section 60(1) & (2) of the IBC. The Respondent cited Section 179, which envisages the DRT as the Adjudicating Authority for individuals unless Section 60 applies. The Respondent relied on the decision of the Mumbai Bench of NCLT in Altico Capital India Ltd. Vs. Rajesh Patel & Ors., where it was held that if the Corporate Debtor is not under CIRP, the application against the Personal Guarantor should be entertained by the DRT. The Respondent also referred to the Supreme Court judgment in Lalit Kumar Jain v. Union of India & Others, which emphasized that the NCLT would be the Adjudicating Authority if a parallel resolution process or liquidation process is pending against the Corporate Debtor. 3. Interpretation of Sections 60 and 179 of the IBC: The Tribunal examined Sections 60(1), 60(2), and 60(3) of the IBC: - Section 60(1) states that the NCLT shall be the Adjudicating Authority for insolvency resolution and liquidation for corporate persons, including personal guarantors. - Section 60(2) specifies that if a CIRP or liquidation proceeding of a Corporate Debtor is pending before the NCLT, an application relating to the insolvency resolution or liquidation of a personal guarantor shall also be filed before the NCLT. - Section 60(3) provides for the transfer of proceedings from the DRT to the NCLT if a CIRP or liquidation proceeding is initiated against the Corporate Debtor. The Tribunal concluded that Section 179(1) of the IBC, which designates the DRT as the Adjudicating Authority for individuals, is subject to Section 60. Since multiple applications for initiating CIRP against the Corporate Debtor were pending before the NCLT, the jurisdiction to entertain insolvency proceedings against the Personal Guarantor lies with the NCLT. 4. Appointment of a Resolution Professional (RP): The Tribunal noted that the Applicant proposed the name of Mr. Rakesh Prasad Khandelwal as the Resolution Professional. The RP accepted the appointment and declared eligibility. The Tribunal appointed Mr. Rakesh Prasad Khandelwal as the RP, directing him to exercise all powers under Section 99 of the IBC and to examine the application, making recommendations for acceptance or rejection within the stipulated time. Conclusion: The Tribunal concluded that the initiation of CIRP of the Corporate Debtor is not a prerequisite for the maintainability of an application under Section 95 of the IBC for initiating IR Process against the Personal Guarantor before the NCLT. The Tribunal directed the commencement of interim-moratorium and appointed Mr. Rakesh Prasad Khandelwal as the Resolution Professional to proceed in accordance with the law. The matter was listed for further hearing on 11.10.2021.
|
