Personal guarantor insolvency proceedings sustained at prima facie stage, with interim moratorium and resolution professional appointment.

A prima facie case was found for initiating insolvency proceedings against the personal guarantor under the Insolvency and Bankruptcy Code, based on the creditor's authorisation, the guaranty documents, and the proposed resolution professional's consent and authorisation. The application was treated as maintainable at the initial stage, and the proposed resolution professional was appointed to examine the application and submit a report within the prescribed time. Interim moratorium commenced from the date of filing under Section 96, suspending legal action or proceedings in respect of the debt during the interim moratorium period.

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Issues: Whether a prima facie case was made out for initiation of insolvency proceedings against the personal guarantor under Section 95 of the Insolvency and Bankruptcy Code, 2016, and whether interim moratorium and appointment of a resolution professional were warranted.

Analysis: The application was supported by the creditor's authorisation, the guaranty documents, and the proposed resolution professional's consent and authorization for assignment. On that basis, the Tribunal found that the requirements for commencement of proceedings against the personal guarantor were satisfied prima facie. The Tribunal therefore directed appointment of the proposed resolution professional to examine the application and submit a report within the prescribed time. It also recorded that interim moratorium under Section 96 commenced from the date of filing of the application, staying legal action or proceedings in respect of the debt during the interim moratorium period.

Conclusion: The application was held maintainable at the prima facie stage, the proposed resolution professional was appointed, and interim moratorium commenced under the Code.

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