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2021 (10) TMI 713 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantor to the Corporate Debtor - existence of debt and dispute or not - HELD THAT - It is pertinent to mention that as per part-III of Form-C, the total debt from the personal Guarantor by way of personal Guarantee given to M/s. RGTL Industries Ltd., including the rate of interest amount to ₹ 20,10,27,358/- - That based on the documents produced and placed on record before this Tribunal and on the submissions made by the Applicant it can be concluded that there is a 'default' on the part of the Personal Guarantor by not fulfilling the debt owed to the Corporate Debtor, i.e., RGTL Industries Ltd. Application admitted - moratorium declared.
Issues:
1. Application under Section 95 of the Insolvency and Bankruptcy Code, 2016 against a personal guarantor. 2. Default in payment by the personal guarantor leading to the initiation of insolvency resolution process. 3. Appointment of a Resolution Professional for the insolvency resolution process. Analysis: Issue 1: Application under Section 95 of the Insolvency and Bankruptcy Code, 2016 against a personal guarantor The application was filed by Bank of Baroda under Section 95 of the Insolvency and Bankruptcy Code, 2016 against Mr. Saurabh Rathi, the personal guarantor to the Corporate Debtor, 'M/s. RGTL Industries Ltd.' The application sought to initiate the insolvency resolution process against the personal guarantor for the outstanding debt amounting to Rupees Twenty Crore Ten Lakh Twenty-Seven Thousand Three Hundred and Fifty-Eight, as on the insolvency commencement date of the Corporate Debtor. Issue 2: Default in payment by the personal guarantor leading to the initiation of insolvency resolution process The Counsel for the Applicant highlighted that the personal guarantor, Mr. Saurabh Rathi, had provided a guarantee to Bank of Baroda for the amounts advanced to the Corporate Debtor. Despite the demand notice issued and the failure of the respondent to make payments, the continuing guarantee provided by the respondent remained in force as per the Indian Contract Act, 1872. The Tribunal found that there was a clear default on the part of the personal guarantor in fulfilling the debt owed to the Corporate Debtor, leading to the approval of the application under Section 95 of the Code. Issue 3: Appointment of a Resolution Professional for the insolvency resolution process The Tribunal allowed the application filed by Bank of Baroda and initiated the interim moratorium as per Section 96(1) of the Code from the date of filing. The appointment of a Resolution Professional, Mr. Anil Matta, was proposed and confirmed by the bench to oversee the insolvency resolution process. The Resolution Professional was directed to make recommendations within the stipulated time and provide a copy of the report to the Creditor. The matter was listed for further proceedings on 08th November 2021. This judgment underscores the legal process involved in initiating insolvency proceedings against a personal guarantor under the Insolvency and Bankruptcy Code, emphasizing the obligations and liabilities of guarantors in case of default. The appointment of a Resolution Professional is crucial for managing the insolvency resolution process and safeguarding the interests of all stakeholders involved.
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