TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Debtor's Section 94(1) application dismissed for attempting to frustrate SARFAESI recovery proceedings</h1> <h3>In Re : Rakesh Rameshkumar Shah, Tamilnad Mercantile Bank Versus Mr. Rakeshkumar Shah</h3> The NCLT Ahmedabad dismissed a debtor's application under Section 94(1) of IBC, 2016, finding it was filed to frustrate recovery proceedings by the ... Scope of the Report of IRP - IRP was appointed on application under Section 94(1) - Proceedings against the Personal Guarantors to Corporate Debtor - Benefit of moratorium as contemplated under Section 96 of the IBC, 2016 - HELD THAT:- It is clearly established that the present application was filed by the debtor herein to thwart the recovery proceedings initiated by the sole Secured Financial Creditor who has obtained physical possession of the secured assets (coowned by the debtor herein) and to frustrate other proceedings under SARFAESI Act, the debtor came running and filed this application. It appears that the sole intention of the debtor herein is to enjoy the moratorium as contemplated under Section 96 of the IBC, 2016 which commences from the date the application is declared defect-free by the Registry of this Tribunal. The second reason which comes to mind at this stage is the order under Section 94(1) of the IBC, 2016 was issued by this Tribunal on 30.05.2022. Nearly one and half years have passed in further proceedings in the matter due to the stay by Hon’ble Supreme Court in the matter of DILIP B JIWRAJKA VERSUS UNION OF INDIA & ORS. [2024 (1) TMI 33 - SUPREME COURT] and in case the debtor was inclined towards any settlement of his debt with the Secured Financial Creditor, he had enough time to pay by way of restructuring plans, or otherwise, if any. No document has been placed before us by the debtor herein to show that he has taken any effective steps for settling the dues of the Secured Financial Creditor. Application allowed. Issues involved:The issues involved in the judgment are the appointment of an Insolvency Resolution Professional (IRP) for a personal guarantor, the recommendation for acceptance of the petition by the IRP, objections raised by the Financial Creditor, filing of multiple applications by the parties, and the intention of the debtor in filing the application.Appointment of IRP:The Tribunal appointed Mr. Rajendra Jain as the IRP under Section 94(1) of the Insolvency and Bankruptcy Code, 2016, with directions to file a report within 10 days. The IRP subsequently filed a report recommending the acceptance of the petition based on various grounds, including loan defaults by the Corporate Debtor and the Personal Guarantor, registration of default in the Information Utility, and the actions of the Financial Creditor to recover the outstanding amount.Financial Creditor's Objections:The Financial Creditor filed IA 515 of 2022 seeking various prayers, including recalling the previous order and alleging that the application was filed with fraudulent and malicious intentions to enjoy moratorium and thwart recovery proceedings. The Financial Creditor detailed the loan disbursement, NPA status, demand notices, and legal actions taken to recover the amount. The Financial Creditor contended that the application was an attempt to obstruct recovery proceedings.Debtor's Response and Multiple Applications:The Debtor filed a reply stating that the IRP's report should be accepted, and the Financial Creditor had no standing to object to the resolution process. The Debtor denied filing the application to scuttle recovery proceedings and mentioned that any plan would be presented to secured creditors only after a specific order. Additionally, the Debtor filed IA 514 of 2022 seeking declarations regarding the application's alleged fraudulent or malicious intentions.Judgment and Disposition:The Tribunal considered the arguments presented by all parties and observed that the IRP's report seemed biased towards the debtor. The Tribunal noted the timing of the application in relation to previous legal actions and concluded that the debtor's intention was to enjoy the moratorium and delay proceedings. Consequently, the Tribunal rejected the main application and the IRP's report. IA 515 of 2022 seeking to recall the previous order was dismissed, while IA 514 of 2022 was allowed, and the application was disposed of accordingly. The Tribunal emphasized the importance of justice in the decision and directed the issuance of a certified copy of the order upon request.
TaxTMI 
TaxTMI 
