Personal guarantor insolvency claim rejected for missing supporting documents and limitation bar.

An application to initiate insolvency resolution against a personal guarantor was rejected because the supporting record was incomplete and the claim was barred by limitation. Although a Resolution Professional had reported in favour of admission, the application did not include the relevant documents concerning the demand notice of invocation and the SARFAESI notice. The tribunal also found that the date of default and the November 2015 demand notice placed the claim outside limitation. As a result, the insolvency proceedings failed at the threshold.

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Issues: Whether the application for initiation of insolvency resolution process against the personal guarantor was liable to be admitted when the supporting documents were incomplete and the claim appeared to be time-barred.

Analysis: The application was filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 read with Rule 6(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019. A Resolution Professional was appointed under Section 99 of the Insolvency and Bankruptcy Code, 2016, and the report recommended admission. However, the record did not enclose the relevant documents relating to the demand notice of invocation and the notice under the SARFAESI Act. The application was also found to be barred by limitation, having regard to the date of default and the demand notice issued in November 2015.

Conclusion: The application was not fit for admission and was rejected.

Final Conclusion: The proceedings for initiation of insolvency resolution process against the personal guarantor failed at the threshold for want of supporting documents and limitation.

Ratio Decidendi: An insolvency application against a personal guarantor may be rejected where the claim is time-barred and the essential supporting documents are not produced.

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