Personal guarantor insolvency application admitted after proof of default and procedural compliance under the IBC framework

The application against the personal guarantor under the Insolvency and Bankruptcy Code was admitted on proof of default and compliance with the prescribed procedure. The record included the personal guarantee, demand notice, and the application filed in the statutory form after the waiting period; the Bench found the guarantor's objection untenable and accepted that default had occurred. The interim moratorium under Section 96 commenced from the date of filing of the application, and the resolution professional on record was confirmed to exercise powers under the Code and submit a reasoned report under Section 99.

---

---

Issues: Whether the application under Section 95 of the Insolvency and Bankruptcy Code, 2016 against the personal guarantor was liable to be admitted on proof of default and compliance with the prescribed procedure.

Analysis: The personal guarantee executed in favour of the financial creditor was placed on record, along with the demand notice issued to the personal guarantor and the application filed in the prescribed form after the statutory waiting period. The record showed the debt due under the guarantee and the Bench found the objection raised by the personal guarantor untenable. On that basis, the Bench accepted that default had occurred and proceeded to act under the statutory framework governing personal guarantor insolvency resolution. The interim moratorium under Section 96 commenced from the date of filing of the application, and the resolution professional already on record was confirmed. The resolution professional was directed to exercise the powers under the Code and submit a reasoned report under Section 99.

Conclusion: The application under Section 95 was allowed, the interim moratorium commenced from the date of filing, and the resolution professional was confirmed for further action under the Code.

---