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TMI Blog2022 (8) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by a personal guarantor to a corporate debtor can only be filed if a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before the NCLT. In other words, a plain reading of the aforesaid provision would show that a personal guarantor to a corporate debtor cannot independently seek initiation of insolvency or bankruptcy etc. proceedings even before the NCLT in terms of sub-section (1) of Section 60, unless the corporate debtor itself is already subject to such pending proceedings before the Tribunal. In the present case, the application filed by the present petitioner (copy Annexure P-17), under the provisions of Section 94(1) of the Code read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for personal Guarantors to corporate Debtors) Rules, 2019, is to initiate an insolvency resolution process in respect of VIJAY KUMAR GHAI , which would only be possible, on a bare reading of Section 60 (2), if the company of which he is a Director and stands as a personal guarantor to, i.e. M/s Priknit Retails Ltd., is already in proceedings before the NCLT for insolvency re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed far before the application under Section 94 of the Code was filed by the personal guarantor to a corporate debtor - even though the respondent herein may suffer longer delays due to the stay that would be deemed to be operating on the proceedings in the complaint filed by him under Section 138 of the Act, by virtue of the interim moratorium stipulated in Section 96 of the Code, there would seem to be no option with this court but to allow the petition and set aside the impugned order passed by the learned JMIC, Jalandhar, dated 25.05.2021. Till a decision is taken by the Adjudicating Authority in terms of Sections 100 and 101 of the Code, on the application filed by the petitioner under Section 94(1) thereof, the proceedings before the learned trial court under Section 138 of the Act, would remain stayed - Application disposed off. - CRM-M-22685-2021 (O&M) - - - Dated:- 4-7-2022 - HON'BLE MR. JUSTICE AMOL RATTAN SINGH Mr. Aalok Jagga, Advocate, for the petitioner Mr. Bal Krishan Mehta, Advocate for the respondent ORDER AMOL RATTAN SINGH, J. 1. Vide this petition, the petitioner challenges by way of invoking jurisdiction of this court under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 138 of the Act, but with the amount still not having been paid, the complaint under the same provision was filed by the respondent herein on 21.03.2012, with summons having been issued to the petitioner by the JMIC, Jalandhar, vide an order dated 28.05.2012. The application under Section 94(1) of the Code (copy Annexure P-17) filed by the petitioner, is seen to be dated 04.02.2021, though with the written communication to the National Company Law Tribunal, Chandigarh Bench, by the proposed Interim Resolution Professional (in terms of Rule 9 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016), is shown to be dated 14.12.2020. 3. Mr. Jagga, learned counsel for the petitioner, pointed to a notification issued by the Government of India in the Department of Corporate Affairs, on 15.11.2019 (copy Annexure P-15), wherein certain provisions of the IBC, including Section 2(e), the most part of Section 78, Section 79, Sections 94 to 187, as also Section 249 and certain clauses of Sections 239 and 240, were notified to have come into force, in relation to personal guarantors qua corporate debtors, with effect from 01.12.2019. Upon query to the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate debtor and that is why Section 14 of the Code has been extensively referred to in the aforesaid judgment, with the said provision falling within Part II of the Code, which is wholly relatable to insolvency resolution and liquidation proceedings for corporate persons, with Part III of the Code being applicable to insolvency resolution and bankruptcy for individuals and partnership firms; and that the said part contains Sections 78 to 187, obviously thereby including Sections 94, 96 and 101. 6. He next submitted that the application of the petitioner not having been admitted by the Adjudicating Authority as yet, Section 101 would not apply presently (unless that application is admitted), which is a provision dealing with moratorium after admission of the application. 7. In support of his arguments Mr. Jagga first referred to the following paragraphs of the judgment in P. Mohanraj (supra), which read as follows:- 36. Section 138 contains within it the ingredients of the offence made out. The deeming provision is important in that the legislature is cognizant of the fact that what is otherwise a civil liability is now also deemed to be an offence, since this liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 138/141 proceeding against a firm so that the moratorium stated therein would apply to such proceedings. If Shri Mehta s arguments were to be accepted, under the same Section, namely, Section 141, two different results would ensue so far as bodies corporate, which include limited liability partnerships, are concerned, the moratorium provision contained in Section 14 of the IBC would not apply, but so far as a partnership firm is concerned, being covered by Sections 96 and 101 of the IBC, a Section 138/141 proceeding would be stopped in its tracks by virtue of the moratorium imposed by these Sections. Thus, under Section 141(1), whereas a Section 138 proceeding against a corporate body would continue after initiation of the corporate insolvency resolution process, yet, the same proceeding against a firm, being interdicted by Sections 96 and 101, would not so continue. This startling result is one of the consequences of accepting the argument of Shri Mehta, which again leads to the position that inelegant drafting alone cannot lead to such startling results, the object of Sections 14 and 96 and 101 being the same, namely, to see that during the insolvency resolution process for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entrepreneurship as the persons in management of the corporate debtor are removed and replaced by entrepreneurs. When, therefore, a resolution plan takes off and the corporate debtor is brought back into the economic mainstream, it is able to repay its debts, which, in turn, enhances the viability of credit in the hands of banks and financial institutions. Above all, ultimately, the interests of all stakeholders are looked after as the corporate debtor itself becomes a beneficiary of the resolution scheme workers are paid, the creditors in the long run will be repaid in full, and shareholders/investors are able to maximize their investment. Timely resolution of a corporate debtor who is in the red, by an effective legal framework, would go a long way to support the development of credit markets. Since more investment can be made with funds that have come back into the economy, business then eases up, which leads, overall, to higher economic growth and development of the Indian economy. What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovenant that as between the guarantor and the financial creditor, the guarantor is also a principal debtor, notwithstanding that he is guarantor to a corporate debtor. 92. As noticed earlier, Section 60 had previously, under the original Code, designated the NCLT as the adjudicating authority in relation to two categories: corporate debtors and personal guarantors to corporate debtors. The 2018 amendment added another category: corporate guarantors to corporate debtors. The amendment seen in the background of the report, as indeed the scheme of the Code (i.e., Section 2 (e), Section 5 (22), Section 29A, and Section 60), clearly show that all matters that were likely to impact, or have a bearing on a corporate debtor s insolvency process, were sought to be clubbed together and brought before the same forum. Section 5(22) which is found in Part II (insolvency process provisions in respect of corporate debtors) as it was originally, defined personal guarantor to say that it means an indi- vidual who is the surety in a contract of guarantee to a corporate debtor. There are two more provisions relevant for the purpose of this judgment. They are Sections 234 and 235 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantor to the corporate debtor shall be filed with the concerned NCLT seized of the resolution process or liquidation. Therefore, the Adjudicating Authority for personal guarantors will be the NCLT, if a parallel resolution process or liquidation process is pending in respect of a corporate debtor for whom the guarantee is given. The same logic prevails, under Section 60(3) , when any insolvency or bankruptcy proceeding pending against the personal guarantor in a court or tribunal and a resolution process or liquidation is initiated against the corporate debtor. Thus if A, an individual is the subject of a resolution process before the DRT and he has furnished a personal guarantee for a debt owed by a company B, in the event a resolution process is initiated against B in an NCLT, the provision results in transferring the proceedings going on against A in the DRT to NCLT. 96. This court in V. Ramakrishnan (supra), noticed why an application under Section 60(2) could not be allowed. At that stage , neither Part III of the Code nor Section 243 had not been notified. This meant that proceedings against personal guarantors stood outside the NCLT and the Code. The non-obstante p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et No.7, Ludhiana versus 1. ICICI Bank Limited, BKC, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra 400051 Email:, 2. State Bank of India, SAMB branch, Fountain Chowk, Civil Lines, Ludhiana, Email: [email protected]. 3. ASREC (India) Ltd. Regd. Office: Salitaire Corporate Park, Bldg. No.2, Unit No.201-202 200-200B, Gr. Floor, Andheri Ghatkopar Link Road, Chakala, Andhere(East), Mumbai-400093 through it s authorized official of it s Delhi Office: 91, 7-78, 9th Floor, Hemkunt Chamber, 89 Nehru Place, New Delhi-110019, Email: [email protected] . He therefore submitted that the said application made by the petitioner is not in his individual capacity at all, but in his capacity as a personal guarantor for his company, i.e. M/s Priknit Retails Limited, and specifically in the context of a dispute between his company (and him) on the one side, with the ICICI Bank, State Bank of India and M/s ASREC (India) Ltd; and therefore it has nothing at all to do with the loan taken in a wholly personal capacity by the petitioner from the respondent. He next submitted that the paragraphs in the judgment of P. Mohanraj, as have been referred to by the learned counsel for the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/2019, 10858/2019, 10860/2019, 10861/2019, 10446/2019. 1. Leave granted. 2. On the facts of these cases, all the complaints filed by different creditors of the same appellant under Section 138 read with Section 141 of the Negotiable Instruments Act were admittedly filed long before the Adjudicating Authority admitted a petition under Section 7 of the IBC and imposed moratorium on 19.03.2019. 3. Given our judgment in Civil Appeal No.10355 of 2018, the said moratorium order would not cover the appellant in these cases, who is not a corporate debtor, but a Director thereof. Thus, the impugned order issuing a proclamation under Section 82 CrPC cannot be faulted with on this ground. The appeals are therefore dismissed. Criminal Appeal arising out of SLP (Criminal) Nos.2246-2247 of 2020 1. Leave granted. 2. In this case, the two complaints dated 12.03. 2018 and 14.03.2018 under Section 138 read with Section 141 of the Negotiable Instruments Act were filed by the respondent against the corporate debtor along with persons in charge of and responsible for the conduct of business of the corporate debtor. On 14.02.2020, the Adjudicating Authority admitted a peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 421 Cr.P.C. against various accused persons, including the corporate debtor and persons who are since deceased. While setting aside the impugned judgments, given our judgment in Civil Appeal No.10355 of 2018, we remand these cases to the Magistrate to apply the law laid down by us in Civil Appeal No.10355 of 2018, and thereafter decide all other points that may arise in these cases in accordance with law. Writ Petition (Criminal) Nos.330/2020, 339/2020, Writ Petition (Civil) No.982/2020, Writ Petition (Criminal) Nos.297/2020, +342/2020, Writ Petition (Civil) No.1417/2020, 1439/2020, 18/2021, Writ Petition (Criminal) No.9/2021, 26/2021. 1. All these writ petitions have been filed under Article 32 of the Constitution of India by erstwhile Directors/persons in charge of and responsible for the conduct of the business of the corporate debtor. They are all premised upon the fact that Section 138 proceedings are covered by Section 14 of the IBC and hence, cannot continue against the corporate debtor and consequently, against the petitioners. 2. Given our judgment in Civil Appeal No.10355 of 2018, all these writ petitions have to be dismissed in view of the fact that su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in terms of the aforesaid provision, when the petitioner had issued a cheque from his personal account as an individual, to repay the debt that he owed the respondent as an individual, with such debt having been incurred as a personal loan, it would not be the National Company Law Tribunal to which the petitioner should have applied for appointment of an IRP/RP and in fact he should have applied to the Debt Recovery Tribunal and consequently the application made to the NCLT in respect of his debt as a personal guarantor to a corporate personality (M/s Priknit Retails Pvt. Ltd.), would not cover any debt that he owes another individual in a purely individual capacity (and not in his capacity as a personal guarantor to a corporate person), and consequently a complaint made by one individual against another under Section 138 of the Negotiable Instruments Act, would not be affected by the application made by the petitioner under Section 94 of the Code. 18. Mr. Mehta next submitted that the petitioner has taken undue advantage of the Code after it came into effect, the cheque in question having bounced in the year 2012, with the complaint under the provisions of Section 138 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention of learned counsel for the petitioner was that though the essential question before the Supreme Court was pertaining to Section 14 of the Code which falls within Part-II thereof, which exclusively applies to corporate debtors, i.e. companies, however their Lordships also having referred to Section 96 in paragraph 38, and having held that even Section 14 of the code would apply to proceedings under Section 138 of the Act, the ratio of the judgment would apply to proceedings between individuals even under Section 138 of the Act. 21. The argument therefore is that the petitioner having initiated an insolvency resolution process against himself by way of an application (copy Annexure P-17) on 03.02.2021, but that application not having been adjudicated upon as to whether the resolution process should apply in the case of the petitioner or not, he is fully covered by the provisions of Section 94(1) read with sub-section (4) thereof; and consequently the interim moratorium in terms of Section 96 would apply, at least till the decision on his application, if not thereafter also in terms of Section 101. Thus even if the debt alleged to have been incurred by the petitioner a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Priknit Retails Limited), 3177, Gurdev Nagar, Street No.7, Ludhiana versus 1. ICICI Bank Limited, BKC, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra 400051 Email:, 2. State Bank of India, SAMB branch, Fountain Chowk, Civil Lines, Ludhiana, Email: [email protected]. 3. ASREC (India) Ltd. Regd. Office: Salitaire Corporate Park, Bldg. No.2, Unit No.201-202 200- 200B, Gr. Floor, Andheri Ghatkopar Link Road, Chakala, Andhere(East), Mumbai-400093 through it s authorized official of it s Delhi Office: 91, 7-78, 9th Floor, Hemkunt Chamber, 89 Nehru Place, New Delhi-110019, Email: [email protected] The first two lines of the application read as follows:- Madam/Sir, I/We hereby submit this application to initiate an insolvency resolution process in respect of VIJAY KUMAR GHAI. (iv) That the petitioner has admittedly filed the aforesaid application before the Tribunal in his capacity as a personal guarantor to M/s Priknit Retails Ltd., of which he was/is a Director. 24. The question before this court therefore is as to whether in the aforesaid circumstances the interim moratorium under Section 96 of the Code would apply to the complaint filed by the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 408 of the Companies Act, 2013 (18 of 2013); xxxxx xxxxx xxxxx (22) personal guarantor means an individual who is the surety in contract of guarantee to a corporate debtor; xxxx xxxx xxxxx xxxxx Section 14: Moratorium. (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or against a corporate debtor for which an order of moratorium has been made under this Part, the period during which such moratorium is in place shall be excluded. xxxx xxxx xxxx xxxx Section 78. Application This Part shall apply to matters relating to fresh start, insolvency and bankruptcy of individuals and partnership firms where the amount of the default is not less than one thousand rupees: PROVIDED that Central Government may, by notification, specify the minimum amount of default of higher value which shall not be more than one lack rupees. Section 79. Definitions. In this Part, unless the context otherwise requires,- (1) Adjudicating Authority means the Debt Recovery Tribunal constituted under sub-section (1) of section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993); (2) associate of the debtor means- (a) a person who belongs to the immediate family of the debtor; (b) a person who is a relative of the debtor or a relative of the spouse of the debtor; (c) a person who is in partnership with the debtor; (d) a person who is a spouse or a relative of any pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, as the case may be; (14) excluded assets for the purposes of this part includes- (a) unencumbered tools, books, vehicles and other equipment as are necessary to the debtor or bankrupt for his personal use or for the purpose of his employment, business or vocation, (b) unencumbered furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his immediate family; (c) any unencumbered personal ornaments of such value, as may be prescribed, of the debtor or his immediate family which cannot be parted with, in accordance with religious usage; (d) any unencumbered life insurance policy or pension plan taken in the name of debtor or his immediate family; and (e) an unencumbered single dwelling unit owned by the debtor of such value as may be prescribed; (15) excluded debt means- (a) liability to pay fine imposed by a court or tribunal; (b) liability to pay damages for negligence, nuisance or breach of a statutory, contractual or other legal obligation; (c) liability to pay maintenance to any person under any law for the time being in force; (d) liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debtor shall not be eligible to apply under subsection (1) if an application under this Chapter has been admitted in respect of the debtor during the period of twelve months preceding the date of submission of the application under this section. 6) The application referred to in sub-section (1) shall be in such form and manner and accompanied with such fee as may be prescribed. xxxx xxxx xxxx xxxx 96. Interim-moratorium-(1) When an application is filed under Section 94 or Section 95- (a) an interim-moratorium shall commence on the date of the application in relation to all the debts and shall cease to have effect on the date of admission of such application; and (b) during the interim-moratorium period- (i) any legal action or proceedings pending in respect of any debt shall be deemed to have been stayed; and (ii) the creditors of the debtor shall not initiate any legal action or proceedings in r espect of any debt . xxxx xxxx xxxx xxxx Section 100: Admission or rejection of application. (1) The Adjudicating Authority shall, within fourteen days from the date of submission of the report under section 99 pass an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the provisions of section 60, the Adjudicating Authority, in relation to insolvency matters of individuals and firms shall be the Debt Recovery Tribunal having territorial jurisdiction over the place where the individual debtor actually and voluntarily resides or carries on business or personally works for gain and can entertain an application under this Code regarding such person. (2) The Debt Recovery Tribunal shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain or dispose of- (a) any suit or proceeding by or against the individual debtor; (b) any claim made by or against the individual debtor; (c) any question of priorities or any other question whether of law or facts, arising out of or in relation to insolvency and bankruptcy of the individual debtor or firm under this Code. 3. XXXXX XXXXX XXXXX 26. Therefore, as regards the applicability of the Code, it would cover even individuals in terms of clause (g) of Section 2. Though the said clause itself excludes personal guarantors to corporate debtors, that category of debtors has been specifically referred to in clause (e) of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 thus contains the definitions as would seem to be relevant to Part-III whereas Section 5 contains definitions as would be relevant to Part-II. 29. Having thus looked at the aforesaid provisions of the Code, let us now examine the other parts of the judgment of the Supreme Court in P. Mohanraj (supra) as have not been already reproduced hereinabove but would have specific significance qua the issue in question. Though paragraph 26 thereof would also have some relevance, that paragraph is not being reproduced as it essentially reproduces Sections 81 and 85 of the Code, after referring to them in the context of Section 14. Thereafter the relevant part of paragraph 27 of that judgment (without reproducing Sections 96 and 101 again), reads as follows:- 27. When the language of Section 14 and Section 85 are contrasted, it becomes clear that though the language of Section 85 is only in respect of debts, the moratorium contained in Section 14 is not subject specific. The only light thrown on the subject is by the exception provision contained in Section 14(3) (a) which is that transactions are the subject matter of Section 14(1). Transaction is, as we have seen, a mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that Sections 96 and 101, when contrasted with Section 14, would show that Section 14 cannot possibly apply to a personal guarantor. When an application is filed under Part III, an interim-moratorium or a moratorium is applicable in respect of any debt due. First and foremost, this is a separate moratorium, applicable separately in the case of personal guarantors against whom insolvency resolution processes may be initiated under Part III. Secondly, the protection of the moratorium under these sections is far greater than that of Section 14 in that pending legal proceedings in respect of the debt and not the debtor are stayed. The difference in language between Sections 14 and 101 is for a reason. 26.1 Section 14 refers only to debts due by corporate debtors, who are limited liability companies, and it is clear that in the vast majority of cases, personal guarantees are given by Directors who are in management of the companies. The object of the Code is not to allow such guarantors to escape from an independent and co-extensive liability to pay off the entire outstanding debt, which is why Section 14 is not applied to them. However, insofar as firms and individuals are con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g before a National Company Law Tribunal, an application relating to the insolvency resolution or liquidation or bankruptcy of a corporate guarantor or personal guarantor, as the case may be, of such corporate debtor shall be filed before the National Company Law Tribunal. 33. Thus, even after the amendment of 2018 in the Code, sub-section (2) of Section 60 effectively states (even in terms of sub-section (1) thereof) that an application relating to the insolvency resolution or bankruptcy of a corporate guarantor or a personal guarantor, shall be filed before the NCLT. Further, any application filed by a personal guarantor to a corporate debtor can only be filed if a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before the NCLT. In other words, a plain reading of the aforesaid provision would show that a personal guarantor to a corporate debtor cannot independently seek initiation of insolvency or bankruptcy etc. proceedings even before the NCLT in terms of sub-section (1) of Section 60, unless the corporate debtor itself is already subject to such pending proceedings before the Tribunal. In the present case, as already not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances the complaint under Section 138 of the Act of 1881 would also fall within the ambit of the phrases all the debts and any legal actions or proceedings pending in respect of any debt as occur in clauses (a) and (b)(i) of sub-section (1) respectively of Section 96, or would the aforesaid expressions be limited to any debt as is concerned or linked in any manner to the corporate debtor for whom the petitioner stands as a personal guarantor, with the respondent herein not being in any manner concerned with the debt of either the corporate debtor or the personal guarantee furnished by the petitioner in respect of the corporate debtor; (2) If the answer to the aforesaid question is in the affirmative, whether proceedings under Section 138 of the Act would be deemed to have been stayed in terms of Section 96 of the Code in view of the fact that the complaint against the petitioner was filed 8 to 9 years prior to the petitioners' application under Section 94 and even about 6 years before the initiation of proceedings against the corporate debtor by the State Bank of India under Section 7 of the Code. 35. As regards the first question, there are two ways of interpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of individual debts by persons who have unlimited liability to pay them. And such guarantors may be complete strangers to the debtor -- often it could be a personal friend. It is for this reason that the moratorium mentioned in Section 101 would cover such persons, as such moratorium is in relation to the debt and not the debtor. Further, the judgment in Lalit Kumar Jains' case (supra) may also be again referred to wherein, while upholding the distinction created between other individuals and personal guarantors to corporate debtors vide sub-section (2) of Section 60 of the Code (as regards the forum before which a personal guarantor would be required to apply under Section 94), it was thereafter held in paragraph 100 (Law Finder edition = para 113 SCC edition) as follows:- 100. It is clear from the above analysis that Parliamentary intent was to treat personal guarantors differently from other categories of individuals. The intimate connection between such individuals and corporate entities to whom they stood guarantee, as well as the possibility of two separate processes being carried on in different forums, with its attendant uncertain outcomes, led to car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound, if one is to consider Mr. Jaggas' argument that the petitioner having sought his own insolvency under Section 94, all his debts would necessarily have to be considered by the Tribunal, that would seem to be in consonance with what has been observed in paragraph 100 of Lalit Kumar Jains' case (reproduced earlier also, supra), to the effect that:- As was emphasized during the hearing, the NCLT would be able to consider the whole picture, as it were, about the nature of the assets available, either during the corporate debtor's insolvency process, or even later; this would facilitate the CoC in framing realistic plans, keeping in mind the prospect of realizing some part of the creditors' dues from personal guarantors. (Emphasis applied in this judgment only). 38. Hence, though in the opinion of this court otherwise a proceeding under Section 138 of the Act, qua a debt as is wholly incurred qua an individual who is not in any manner connected to the corporate debtor that the petitioner stood a personal guarantor for, nor to the corporate debt itself, would need to proceed independently so as not to make the complainant in such proceedings under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endent of the proceedings under the Code against the corporate debtor itself and further, there is no interim moratorium referred to in Section 14, with the moratorium mentioned in that provision, being one as has to be declared by the Adjudicating Authority; and consequently the Supreme Court held that such declaration having come at a stage far after the proceedings were initiated under Section 138 of the Act, the moratorium would not apply (obviously also because the Directors were treated different to the corporate debtor itself); which is a wholly different situation to that as is postulated in Section 96, wherein it is an interim moratorium that comes into effect, by which all proceedings qua any debt of the individual/partnership firm etc. would be deemed to have been stayed. 40. Consequently, even though the respondent herein may suffer longer delays due to the stay that would be deemed to be operating on the proceedings in the complaint filed by him under Section 138 of the Act, by virtue of the interim moratorium stipulated in Section 96 of the Code, there would seem to be no option with this court but to allow the petition and set aside the impugned order passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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