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TMI Blog2024 (9) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions contending, inter-alia, that the report as filed by the Resolution Professional does not satisfy the requirements envisaged under Section 99 of IBC, besides that the Resolution Professional failed even to verify whether the financial creditor had filed any document evidencing compliance of sub section 4 (b) of Section 95 IBC. The Postal Slip issued by the Postal Authorities for the cover purportedly containing the Demand Notice, discloses that the same was tendered at the post office on 18.10.2021 for despatch to the addressee. The Postal Consignment Track Report at page 66 of the Company Petition, discloses that the above postal consignment has been returned to the addressee with an endorsement dated 20.10.2021 left without instructions and the returned cover has been delivered to the addressee on 22.10.2021 itself. Thus, the Postal Consignment Track Report clearly falsifies the contention of the Financial Creditor that second Demand Notice dated 16.10.2021 has been served on the Personal Guarantor. Here it is also pertinent to note that even while it is the case of the Financial Creditor that the property bearing the address to which the purported Demand Notice has been se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantor further undertook to indemnify and keep the lenders indemnified against all loses, damages, costs, claims and expenses whatsoever, which the lenders may suffer, pay or incur by reason of or in connection with any default on the part of the Corporate Debtor. 4. The Financial Creditor annexed the following documents to prove the existence of debt and amount in default: - (a) Copy of Sanction Letter dated 29.09.2011 - Annexure-B (b) Form of Guarantee for advances and credits Generally dated 29.09.2011. (c) Demand Notice dated 17.09.2020 under Section 25 to 28 under the RDB Act, 1993. (d) Demand Notice dated 15.12.2020. (e) Copy of the final order dated 27.04.2017 by Hon'ble DRT in OA No. 505 of 2017. (f) Copy of Recovery Certificate No. RC/471/2020. 5. The accounts of the Corporate Debtor were classified as Non-Performing Asset (NPA) on 28.11.2012. It is further stated that the loan accounts of the Corporate Debtor were transferred to the SAM-V Branch for recovery of the dues as per the Petitioner's Bank policy, following classification of accounts as NPA on 28.11.2012, 6. The Financial Creditor has exercised its rights and remedies against the Corporate Debtor under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021, (ii) In cases where the limitation would have expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03.10.2021. In the event the actual balance period of limitation remaining, with effect from 03.10.2021, is greater than 90 days, that longer period shall apply . Thus, the Petitioner submits that after excluding the said period, the Petition is filed within 3 years from the date of course of action as per Article 137 of the Limitation Act. 11. On presentation of the petition, this Tribunal on 05.01.2022 granted has appointed Shri P. Siva Rama Prasad as Interim Resolution Professional, directing him to file his report within 10 days of his appointment, in terms of Section 99 of the Code and further directed to serve notice on the Personal Guarantor, which has been complied by the Petitioner and memo dated 05.02.2022 to that effect has been filed with this Tribunal. RP's REPORT 12. Accordingly, the RP has filed his report on 04.02.2022, has recommended the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as claimed by the Petitioner, since the guarantee provided by 1st Respondent is in the nature of standalone guarantee for the repayment of working capital loan and that the petition is barred by limitation. the limitation period would start running when a demand was made for payment of guaranteed amount. Further, according to the 1st Respondent the debt became due on 27.11.2012 as per the repayment term in the letter of acceptance of sanction and not 25.04.2017 as claimed by the Petitioner. The 1st Respondent further contends that even assuming but not conceding to the position that the cause of action arose on 27.11.2012 itself, the Guarantee Agreement was invoked on a later date i.e. vide demand notice dated 24.12.2012 and by virtue of this invocation, limitation period of 3 years commenced from the said date and the Petitioner could not have availed the remedies under the IBC, as the Code did not come into effect then and submits that present application is barred by limitation as the same is not filed within 03 years of declaration of NPA or default. (d) It is contended that the Petitioner has exhausted its remedy to the cause of action, pursuant to the decree passed by the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments supported by relevant material particulars. In essence, the adjudicating authority conducts an independent assessment, not solely relying on the resolution professional's report, to decide the fate of applications under Section 94 or 95 of the IBC . (Emphasis is ours) 18. Now we shall refer to section 100 of IB Code, which is as below. Section 100: Admission or rejection of application. *100. (1) The Adjudicating Authority shall, within fourteen days from the date of submission of the report under section 99 pass an order either admitting or rejecting the application referred to in section 94 or 95, as the case may be. (2) Where the Adjudicating Authority admits an application under sub-section (1), it may, on the request of the resolution professional, issue instructions for the purpose of conducting negotiations between the debtor and creditors and for arriving at a repayment plan. (3) The Adjudicating Authority shall provide a copy of the order passed under sub- section (1) along with the report of the resolution professional and the application referred to in section 94, or 95, as the case may be, to the creditors within seven days from the date of the said order. (4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirements envisaged under Section 99 of IBC, besides that the Resolution Professional failed even to verify whether the financial creditor had filed any document evidencing compliance of sub section 4 (b) of Section 95 IBC. According to the personal guarantor he was not served with notice of demand, mandated under sub-section 4 (b) of section 95 IBC by the financial creditor before initiating the present insolvency resolution process against him. 24. Ld. Senior Counsel for the Personal Guarantor placing reliance on the objections filed besides the record submitted by the financial creditor regarding 'service' of demand notice by the financial creditor on the personal guarantor, strongly contended that no demand notice much less the demand notice dated 16.10.2021 has been served on the personal guarantor and in the absence of service of demand notice mandated under sub-section (4) (b) of Section 95 of IBC on the personal guarantor, the present company Petition is liable to be dismissed. Dwelling further on the aspect of non service of demand notice on the personal guarantor, Ld. Sr. Counsel stated that the service of demand notice in Form-B is required for entertaining a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditor may apply either by himself, or jointly with other creditors, or through a resolution professional to the Adjudicating Authority for initiating an insolvency resolution process under this section by submitting an application. (2) A creditor may apply under sub-section (1) in relation to any partnership debt owed to him for initiating an insolvency resolution process against-- (a) any one or more partners of the firm; or (b) the firm. (3) Where an application has been made against one partner in a firm, any other application against another partner in the same firm shall be presented in or transferred to the Adjudicating Authority in which the first mentioned application is pending for adjudication and such Adjudicating Authority may give such directions for consolidating the proceedings under the applications as it thinks just. (4) An application under sub-section (1) shall be accompanied with details and documents relating to-- (a) the debts owed by the debtor to the creditor or creditors submitting the application for insolvency resolution process as on the date of application; (b) the failure by the debtor to pay the debt within a period of fourteen days of the service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (4) (b) (c) of section 95 IBC, mandates that an application under sub-section (1) of section 95 IBC by the creditor, shall be accompanied with details and documents relating to-- (a) the debts owed by the debtor to the creditor or creditors submitting the application for insolvency resolution process as on the date of application; (b) the failure by the debtor to pay the debt within a period of fourteen days of the service of the notice of demand; and (c) relevant evidence of such default or non-repayment of debt. 31. The Company Petitioner on the aspect compliance of service of notice of demand on the Personal Guarantor, in its synopsis of submissions has stated that, the Financial Creditor was constrained to issue another Demand Notice dated 16.10.2021 to the Respondent No.1 in terms of Rule 7(1) of Insolvency and Bankruptcy (Application to the Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtors) Rules, 2019 and the said demand notice dated 16.10.2021 was duly served upon Respondent No.1, however, he failed to reply to the said Notice . 32. In support of this plea, the petitioner relied on Annexure-L of the company petition, nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission of report by Resolution Professional : (1) The resolution professional shall examine the application referred to in section 94 or section 95, as the case may be, within ten days of his appointment, and submit a report to the Adjudicating Authority recommending for approval or rejection of the application. Application filed under section 95 has been examined and the report referred to herein is being submitted within the time stipulated therefor. (2) Where the application has been filed under section 95, the resolution professional may require the debtor to prove repayment of the debt claimed as unpaid by the creditor by furnishing (a) evidence of electronic transfer of the unpaid amount from the bank account of the debtor; (b) evidence of encashment of a cheque issued by the debtor; or (c) a signed acknowledgment by the creditor accepting receipt of dues. The debtor/ Personal Guarantor has not submitted any evidence having paid the debt claimed as unpaid by the creditor. The debtor/ Personal Guarantor has not responded to the Notice dated 15.12.2020 and also to the Notice dated 16.10.2021. Hence it is concluded that the debt claimed by the creditor remains unpaid. 37. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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