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2022 (10) TMI 249 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantors to Corporate Debtor - Section 94 of Insolvency and Bankruptcy Code, 2016 read with Rule 6(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019 - HELD THAT - After perusal of the report submitted by the Resolution Professional, there does not appear to be any request of the Resolution Professional for issuance of instruction for the purpose of conducting negotiations between the debtors and the creditors for arriving at the repayment plan. No objection has been received or filed by Personal Guarantor against the report submitted by Resolution Professional. Therefore, based on the reasons recorded in the report submitted by the Resolution Professional, the application filed under the provisions of Section 94 of IBC, 2016 is hereby admitted under Section 100 of the IBC, 2016. Petition admitted - moratorium declared.
Issues:
Initiation of Insolvency Resolution Process against Personal Guarantor under Insolvency and Bankruptcy Code, 2016. Analysis: 1. The petition was filed by the Personal Guarantor seeking initiation of the Insolvency Resolution Process against himself, who had extended a personal guarantee to a Corporate Debtor. The debt exposure for the Corporate Debtor was specified to be Rs. 184.84 crores, with a claim of Rs. 120 crores against the Corporate Debtor. The Adjudicating Authority directed consideration of any minor discrepancies in the claimed amount before the Resolution Professional. 2. The applicant confirmed compliance with Section 94(4) and (5) of the Insolvency and Bankruptcy Code, 2016. The Resolution Professional was appointed, and notice to creditors was issued. The Resolution Professional recommended admission of the application under Section 94 of the Code based on the applicant's non-payment to creditors and provided net worth information. 3. The Resolution Professional's report recommended approval for initiation of the Insolvency Resolution Process against the Personal Guarantor due to defaults in loan repayment by the Corporate Debtor and the Guarantor. No objections were received, leading to the admission of the application under Section 100 of the IBC, 2016, initiating the moratorium period. 4. The Resolution Professional was directed to publish a public notice inviting claims from creditors and prepare a list of creditors within 30 days. The debtor was to prepare a repayment plan in consultation with the Resolution Professional, and a meeting of creditors may be summoned if deemed necessary by the Resolution Professional. 5. The meeting of creditors, if summoned, was to be conducted as per specified sections. The Resolution Professional was required to prepare a report on the repayment plan and submit it to the Authority. The Resolution Professional's functions were to be performed in compliance with the code of conduct provided under Section 208 of the IBC, 2016. 6. Consequently, the application under Section 94(1) of the IBC, 2016 was allowed and admitted, initiating the Insolvency Resolution Process against the Personal Guarantor.
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