Tribunal grants Union Bank's application under IBC Section 95, validates demand notice, appoints Resolution Professional

The Tribunal allowed the application filed by Union Bank of India under Section 95 of the IBC against the Personal Guarantor. It confirmed the validity of the service of Form B demand notice, initiating the interim moratorium. The appointment of the Resolution Professional was also confirmed, with directions to proceed as per the IBC provisions. The matter was listed for further hearing on 01.03.2022.

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Issues Involved:
1. Validity of service of Form B demand notice.
2. Compliance with statutory requirements for serving notice.
3. Objection by the Respondent regarding non-receipt of demand notice.
4. Commencement of Interim Moratorium.
5. Appointment and role of Resolution Professional.

Detailed Analysis:

1. Validity of Service of Form B Demand Notice:
The primary issue was whether the Form B demand notice was duly served upon the respondent as per the provisions of the Insolvency & Bankruptcy Code (IBC). The Petitioner claimed to have served the notice at the respondent's residential address, and it was received by the respondent's son. The Tribunal held that this constituted valid service under Rule 3(h) of the Personal Guarantor Rules, which allows for service by post, speed post, courier, or electronic form, and if these methods fail, by affixing the notice to the outer door of the residence.

2. Compliance with Statutory Requirements for Serving Notice:
The Respondent argued that since he was in judicial custody, the notice should have been served as per Order 5 Rule 24 of the Civil Procedure Code (CPC), which requires delivery to the officer in charge of the prison. The Tribunal distinguished between the issuance of a demand notice and the service of summons, concluding that the service of Form B notice was in compliance with Rule 7 and Rule 3(h) of the Personal Guarantor Rules.

3. Objection by the Respondent Regarding Non-Receipt of Demand Notice:
The Respondent contended that the demand notice was not served as mandated by the Code, and thus the petition should be dismissed. The Tribunal referred to precedent cases, including the Supreme Court's judgment in Pepsu Road Transport Corporation vs. Amandeep Singh, which held that personal service is not necessary unless explicitly required by regulation. The Tribunal found that the service of the notice at the respondent's residential address was sufficient and dismissed the respondent's objections.

4. Commencement of Interim Moratorium:
The Tribunal noted that from the date of filing the application, an interim moratorium commenced as per Section 96(1) of the IBC. This interim moratorium stays any pending legal actions or proceedings regarding debts and prevents creditors from initiating new legal actions.

5. Appointment and Role of Resolution Professional:
The Tribunal confirmed the appointment of Mr. Santanu T. Ray as the Resolution Professional, emphasizing the importance of safeguarding the assets of the Personal Guarantor. The Resolution Professional is tasked with making recommendations for the acceptance or rejection of the application within the stipulated time under Section 99 of the IBC. The Tribunal directed the Resolution Professional to provide a copy of the report to the creditor once filed.

Conclusion:
The Tribunal allowed the application filed by the Union Bank of India under Section 95 of the IBC against the Personal Guarantor, confirming the validity of the service of Form B demand notice and initiating the interim moratorium. The appointment of the Resolution Professional was also confirmed, with directions to proceed as per the provisions of the IBC. The matter was listed for further hearing on 01.03.2022.

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