Grant of Application to Initiate Insolvency Resolution Process for Personal Guarantor

The court granted the application under section 95(1) of the Insolvency and Bankruptcy Code, 2016 to initiate the Insolvency Resolution Process against a personal guarantor for a corporate debtor. The Resolution Professional was appointed, and procedural directions were issued for compliance and future listing of the matter.

---

---

Issues involved:
Initiation of insolvency resolution process against a personal guarantor under the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Application under IBC, 2016 and related rules:
The case involves an application filed under section 95(1) of the Insolvency and Bankruptcy Code, 2016, along with relevant rules and regulations, seeking to initiate the Insolvency Resolution Process against a personal guarantor for a corporate debtor. The applicant, a banking company, extended credit facilities to the principal borrower, and the personal guarantor executed deeds of guarantees for the repayment of loans. Due to non-compliance by the corporate debtor, the loan accounts were classified as NPA. The applicant had previously taken legal actions against the guarantors, and the corporate debtor went into liquidation after being admitted under the Corporate Insolvency Resolution Process (CIRP).

2. Execution of personal guarantee and demand notice:
The personal guarantor executed a personal guarantee in favor of the applicant to secure repayment of the credit facilities. A demand notice was issued under the relevant rules, but the guarantor failed to pay the amount recalled by the financial creditor. Consequently, the applicant sought the initiation of the insolvency resolution process against the guarantor.

3. Appointment of Resolution Professional:
The applicant proposed the appointment of an Insolvency Professional as the Resolution Professional, who consented to the appointment. The Resolution Professional was directed to file a declaration confirming eligibility within seven days. The Resolution Professional was granted powers as per the Insolvency and Bankruptcy Code, 2016, to make recommendations on the application and provide a report to the Adjudicating Authority.

4. Procedural directions and future listing:
The Counsel for the Applicant was directed to serve the order and related documents on the Resolution Professional for compliance. The matter was listed for further proceedings on a specified date. The Registry was instructed to send copies of the order to all parties and their respective counsels. Additionally, the issuance of a certified copy of the order was subject to compliance with formalities.

This detailed analysis of the judgment highlights the legal proceedings, the grounds for initiating the insolvency resolution process against the personal guarantor, the appointment of the Resolution Professional, and the procedural directions for future compliance and listing of the matter.

---