NCLT Kolkata grants insolvency process against guarantor under IBC 2016

The National Company Law Tribunal, Kolkata Bench, granted the Applicant's request to initiate the insolvency resolution process against the personal guarantor, Smt. Niharika Devi Dinodiya, under the Insolvency and Bankruptcy Code, 2016. The Tribunal appointed Mr. Neeraj Kumar Sureka as the Resolution Professional to oversee the process and instructed him to provide recommendations within the specified timeframe. The Resolution Professional was further directed to share the report with the Applicant and the Adjudicating Authority, with the matter scheduled for future proceedings.

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Issues: Application for initiating the Insolvency Resolution Process against a personal guarantor under the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. Background and Application: The case involves an Application filed under section 95(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against a personal guarantor, Smt. Niharika Devi Dinodiya, for Rythem Overseas Trade Limited. The Applicant, a banking company, extended credit facilities to the principal borrower, ROTL, which failed to repay, leading to classification as NPA.

2. Legal Proceedings: The Applicant previously filed an original application against the guarantors before the Debts Recovery Tribunal-I, Kolkata. Additionally, the Corporate Debtor, ROTL, was admitted under Corporate Insolvency Resolution Process (CIRP) and later ordered for liquidation. The personal guarantor executed guarantees to secure repayment, but failed to comply with the demand notice issued by the Applicant.

3. Initiation of Insolvency Process: The Applicant sought initiation of insolvency resolution process against the personal guarantor, invoking the provisions of the Insolvency and Bankruptcy Code, 2016. The filing of the Application triggered an interim-moratorium under section 96(1)(a) of the IBC, 2016, providing protection to the Applicant.

4. Appointment of Resolution Professional: The Applicant proposed the appointment of an Insolvency Professional, Mr. Neeraj Kumar Sureka, as the Resolution Professional. The Tribunal appointed Mr. Sureka as the Resolution Professional, directing him to fulfill all requirements and exercise powers under section 99 of the IBC, 2016.

5. Further Directions: The Resolution Professional was instructed to make recommendations on the Application within the stipulated time and provide a copy of the report to the Applicant and the Adjudicating Authority. The Applicant's Counsel was directed to serve the Order and documents on the Resolution Professional, with proof of service to be filed. The matter was listed for a future date, and e-copies of the Order were to be sent to all parties and their Counsel.

This comprehensive analysis outlines the legal judgment issued by the National Company Law Tribunal, Kolkata Bench, regarding the initiation of insolvency proceedings against a personal guarantor under the Insolvency and Bankruptcy Code, 2016.

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