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TMI Blog2025 (3) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... ties extended by the Canara Bank. 2. The case of the Applicant/ Personal Guarantor is that the Applicant as Personal Guarantor had given a personal guarantee on 06.03.2024 in respect of Credit Facilities of Rs. 9,50,00,000/- granted in favour of Corporate Debtor -M/s Bala Treepura Agro Industries Limited by the Respondent Bank/Canara Bank, for which various loan/security documents were executed in favour of the Respondent Bank/Canara Bank. 3. However, after availing the aforesaid Loan/Credit Facilities, the Corporate Debtor failed to maintain financial discipline as per terms and conditions of the loan agreement due to which loan account became irregular and Corporate Debtor defaulted in repayment of dues. Accordingly, the debt was classified as Non-Performing Asset by the Respondent Bank/Canara Bank on 26.09.2024. 4. Thereafter, Demand Notices dated 27.09.2024 was issued by the Respondent Bank/Canara Bank U/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, calling upon the borrower M/s Bala Treepura Agro Industries Limited as well as the Applicant and others to repay the amount mentioned in the Demand Notice wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Respondent Bank/Caraan Bank on 20.01.2025 filed its Affidavit in reply with inter-alia following objections: - (i). As per Section 60(2) & (4) of IBC, a personal guarantor's petition is valid only if CIRP/liquidation of the corporate debtor is pending. No such proceedings exist. (ii). Under Section 5(12) of IBC, insolvency starts only after CIRP admission. Since no CIRP exists, the petition is premature. (iii). Canara Bank sanctioned loans totalling Rs. 9.50 crore to Bala Treepura Agro Industries Ltd. In which the petitioner stood as a personal guarantor and mortgagor which turned NPA (26.09.2024). SARFAESI action & DRT proceedings (OA No. 07/2025) are ongoing for Rs. 9.89 Cr. recovery. (iv). The petitioner has filed this insolvency application only to derail the recovery process initiated under SARFAESI and to secure an undue moratorium. (v). The petitioner has allegedly misused the sanctioned funds and siphoned off money, causing a huge loss to public funds. (vi). The petition fails to meet mandatory requirements, it lacks essential documents (Banker's Book evidence, title records, statement of affairs) and delayed IRP report (Sec. 99, IBC) which further ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor -M/s Bala Treepura Agro Industries Limited by the Respondent Bank/Canara Bank. 15. However, after availing the aforesaid Loan/Credit Facilities, the Corporate Debtor defaulted in repayment of dues and on 26.09.2024 the debt was classified as Non-Performing Asset by the Respondent Bank/Canara Bank. 16. Thereafter, the Respondent Bank/Canara Bank admittedly recalled the loan accounts and invoked the Personal Guarantee by serving Recall Notice dated 07.10.2024 calling upon the borrower M/s Bala Treepura Agro Industries Limited as well as the Applicant and others to repay the amount mentioned in the recall notice with further interest and other charges. 17. The Personal Guarantor's liability arises from the execution of the personal guarantee, making him coextensively liable with the Corporate Debtor. The default on the part of the Corporate Debtor triggers the liability of the Personal Guarantor as per Sections 126 to 128 of the Indian Contract Act, 1872, and the Financial Creditor has the right to invoke the guarantee 18. In the present case Personal Guarantor's liability crystallized upon invocation of the guarantee on 07.10.2024 by the Respondent Bank/Canara Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early lays down that Adjudicating Authority in addition to insolvency resolution and liquidation for Personal Guarantors, shall be the NCLT having territorial jurisdiction over the place where the registered office of a Corporate Person is located...................................(p24) " 23. Therefore, the petition filed by the Applicant /Personal Guarantor on 18.12.2024 under Section 94 of the seeking initiation of Insolvency Resolution Process in terms of in terms of Rule 6 of the IB (AAA for IRP for PGCD) Rules, 2019 is considered maintainable as the petition meets all procedural and substantive requirements under the IBC. 24. It is also noted under section 128 of Indian Contract Act, 1872 that when a default is committed, the Principal Borrower and Surety are jointly and severally liable to Creditor and Creditor has the right to recover its dues from either of them or both of them simultaneously. For benevolent reference, the said section of Indian Contract Act, 1872 is reproduced below:- "The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract." 25. The Hon'ble Supreme Court in the judgement of Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings in respect of any debt; and (c) The debtor shall not transfer, alienate, encumber, of 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. II. Though the Applicant/Personal Guarantor has proposed the name of Insolvency Professional as Resolution Professional who was earlier appointed as IRP in the same matter when Section 97 application was allowed vide Order dated 03.01.2025. However, we are not inclined to re-appoint the same IP as Resolution Professional. Accordingly, we hereby appoint another IP from the list provided by the IBBI which is valid for the period 01.01.2025 to 30.06.2025. Hence, we appoint Truvisory Insolvency Professional Private Limited, Registration No. IBBI/IPE-0103/IPA-2/2022-23/50020, E-mail: contactanshulguptafagmail.com, as Resolution Professional in the matter. III. The newly appointed, RP 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 Ahmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of the Report under sub- section (1) of Section 106 of IBC, 2016, for which at least 14 days' notice to the creditors as per the list prepared shall be issued by all modes. Such notice must contain the details as provides under the provisions of Section 107 of IBC, 2016. X. The meeting of the creditors shall be conducted in accordance with Sections 108, 109, 110 & 111 of IBC, 2016. The Resolution Professional shall prepare a report of the meeting of the creditors on repayment plan with all details as provided under Section 112 of IBC, 2016 and submit the same to this Tribunal, copies of which shall be provided to the Debtor and the Creditors. It is made clear that the Resolution Professional shall perform his functions and duties in compliance with the Code of Conduct provided under Section 208 of IBC, 2016. XI. The Resolution Professional shall submit his periodic reports before this Tribunal every 30 days. 29. In terms of the above, CP(IB) / 371 (AHM) /2024 filed under Section 94(1) of the IBC, 2016 is admitted and the Insolvency Resolution Process stands initiated against the Applicant/Personal Guarantor. 30. Accordingly, IA/91(AHM) 2025 in CP(IB)/371 (AHM)/2024 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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