2024 (9) TMI 1606 - Tri - IBC

Maintainability of application filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 - guarantee was not invoked against the applicant for recovery of the amount - Petitioner has not produced and has suppressed from this Tribunal regarding the cases filed by the Respondent under Negotiable Instrument Act - HELD THAT - The Demand Notice dated 07.03.2018, which is the basis of the default as claimed by the Appellant has been filed along with Application. The notice is addressed to Rutika Creation Pvt. Ltd, the Corporate Debtor and Kiran Sanjaybhai Kanani, the other guarantor but not to the applicant. Therefore, the guarantee was not invoked by the Kotak Mahindra Bank vide demand notice dated 07.03.2018 against this applicant. Apart from this document, the applicant has not produced or placed any other document to show that guarantee was invoked against the applicant for the recovery of the amount. This application is dismissed for filing an application being a co borrower cum guarantor in which there are certain details not revealed or attached. This application is appears to be filed to escape from the action initiated by financial creditor. Since he appears to have signed the loan as director cum guarantor, the personal insolvency on the grounds of this default cannot be filed under Sec 94 of IBC. Further the loan agreement clause 11.6 restricts default only to arbitration. It is not agreed that the report submitted by the RP that the present application is maintainable as the guarantee has not been invoked in respect of the applicant. The report of the RP is found to be not satisfactory in examining the eligibility of the borrower to file under Sec 94 of IBC. In sequel to the above, the present application is not maintainable. Petition dismissed.

Summary

The Tribunal dismissed the application filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 as the guarantee was not invoked against the applicant for recovery of the amount. The application was deemed to be an attempt to escape from creditor action, and the loan agreement restricted default only to arbitration. The report submitted by the Resolution Professional was found unsatisfactory, leading to the rejection of the application CP(IB) 60 of 2022.