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TMI Blog2022 (5) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... rs shall be sufficient notice to or demand on the Guarantors - CIRP can be proceeded against the Personal Guarantor as an irrevocable Deed of Guarantee has been signed between the SBI led Consortium and the Personal Guarantor. The liability of the Personal Guarantor continues and the Financial Creditor is in condition to realize the default amount from the Personal Guarantor. On-going through the averments in the IBA, the reply of Respondents after the report of the Resolution Professional as also the report of Resolution Professional, it is opined that this is a fit case for admission and proceed against the Personal Guarantor/Respondent and initiate Corporate Insolvency Resolution Process. It is also seen from the report of Resolution Professional that he has not recommended for a negotiation between the parties for arriving at an amicable settlement for repayment - Petition admitted - moratorium declared. - CP (IB) No. 168 of 2021 - - - Dated:- 27-4-2022 - M.B. Gosavi, Member (J) And Kaushalendra Kumar Singh, Member (T) For the Appellant : Pratik Thakkar, Ld. Counsel For the Respondents : Ravi Pahwa, Ld. Counsel and Hiten Parikh, PCA ORDER 1. This Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he request of the lenders of the Corporate Debtor PNB Investment Services Limited agreed to act as Scrutiny Trustee through Security Trustee Agreement dated 22.03.2014. The SBI led consortium also agreed to restructure the Corporate Debt under the Corporate Debt Restructuring Forum and entered into the Master Restructuring Agreement dated 22.03.2014. 4. The Corporate Debtor availed further credit facilities and its Directors entered into Mortgage Deed dated 05.04.2014. PNB Investment Services Limited acted as Security Trustee as per the Security Trustee Agreement dated 22.03.2014. 5. Deed of Guarantee dated 25.04.2014 was executed by the Personal Guarantee in favour of SBI led Consortium banks. The Personal Guarantor also agreed and provided indemnity to restructure the financial liabilities to the extent of Rs. 1286.39 crores. The Personal Guarantor executed a Trust and Retention Account Agreement dated 27.06.2014 as per the terms of the Deed of Guarantee. 6. The Corporate Debtor and the Personal Guarantor executed Revival Letter dated 13.10.2016 in reference to loan amount of Rs. 50,92,61,047.92/- plus interest in favour of the Financial Creditor. 7. A legal notice da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Report are as follows: (i) The IRP vide email and letter dated 24.11.2021 intimated Mr. Chetan Jayantilal Karia regarding order dated 05.10.2021 and confirmation from IBBI for appointment as IRP but no reply was received from the Personal Guarantor. (ii) The total amount of debt as on 31.07.2021 is Rs. 1,76,45,58,095.31/- includes the cash credit, term loans, working capital term loan, funded interest term loan and the interest overdue. As per section 78 of IBC, 2016, where the amount of default is not less than Rs. 1000, Part III, i.e. provisions relating to fresh start, insolvency and bankruptcy of individuals and partnership firms shall apply. The IRP concluded that there is a default amount of more than Rs. 1000 after reviewing the documents attached with the application. (iii) The RP has submitted that as per Rule 3(e) of the Personal Guarantor Insolvency Rules, the Guarantor means a debtor who is personal guarantor to a Corporate Debtor and in whose respect guarantee has been invoked by the Creditor which remains unpaid in full or part. (iv) The RP has also submitted that as per section 128 of the Indian Contract Act, 1872, a co-extensive liability will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igations of the Guarantors hereunder shall be discharged except by performance and then only to the extent of such performance, such obligation shall not be conditional on the receipt of any prior notice by the Guarantors or by the Borrower and the demand notice by the Lenders shall be sufficient notice to or demand on the Guarantors. Therefore, based on the above mentioned case law, CIRP can be proceeded against the Personal Guarantor as an irrevocable Deed of Guarantee has been signed between the SBI led Consortium and the Personal Guarantor. 14. Further, the Hon'ble Supreme Court in the matter of Lalit Kumar Jain vs. Union of India Ors. in the Transferred Case (Civil) No. 245/2020 has observed as under:- 108. It is therefore, clear that the sanction of a resolution plan and finality imparted to it by Section 31 does not per se operate as a discharge of the guarantor's liability. As to the nature and extent of the liability, much would depend on the terms of the guarantee itself. However, this court has indicated, time and again, that an involuntary act of the principal debtor leading to loss of security, would not absolve a guarantor of its liability. In Mahara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 114 whichever is earlier as provided under Sec 101 of IBC, 2016. During the moratorium period; a) Any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed; and b) The creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt; and c) The debtor shall not transfer, alienate, encumber, or dispose of any of his assets or his legal rights or beneficial interest therein; d) The provisions of this section shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. 2. The Resolution Professional viz., Mr. Sunil Kumar Agarwal, having Registration No: IBBI/IPA-001/IP-PO1390/2018-2019/12178, office at 603/6, Devnandan Heights, near Poddar School, New C.G. Road, Chandkheda, Ahmedabad-382424, Gujarat [e-mail id - [email protected]] who was appointed when the Section 97 application was allowed vide Order dated 05.10.2021, is directed to cause a public notice published on behalf of the Adjudicating Authority within 7 days of passing this Order on the website of the NCLT Ahmedabad Bench, inviting claims fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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