Service of Form B notice and suppression of material facts can uphold personal insolvency proceedings against a guarantor.

Service of a Form B demand notice under the Insolvency and Bankruptcy Code was held sufficient where it was sent to the guarantor's addresses furnished in the guarantee agreement and reflected in bank records, and where the record showed receipt at one address. A mere assertion that the guarantor had shifted residence did not rebut the presumption of service or invalidate initiation under Section 95. The Tribunal also treated concealment of material facts, including suppression of subsequent developments and lack of candour in the appeal, as evidence of bad faith. On that basis, the challenge was rejected, the admission order was sustained, and costs were imposed.

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Issues: (i) Whether the demand notice in Form B was not served so as to vitiate the initiation of proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016; (ii) Whether the appeal was liable to be dismissed on account of concealment of material facts and lack of bona fides.

Issue (i): Whether the demand notice in Form B was not served so as to vitiate the initiation of proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The notice had been issued to the addresses furnished by the guarantor in the guarantee agreement and reflected in the bank records. The record also showed that the application under Section 95, along with the demand notice, was received at one of the addresses. In these circumstances, a presumption of service arose, and the guarantor could not deny knowledge of the proceedings merely by asserting that he had shifted residence. The purpose of notice being to impart knowledge having been satisfied, the plea of non-service was not accepted.

Conclusion: The challenge based on non-service of the Form B demand notice failed and the initiation of proceedings was not vitiated.

Issue (ii): Whether the appeal was liable to be dismissed on account of concealment of material facts and lack of bona fides.

Analysis: The guarantor had participated in the insolvency proceedings, did not disclose the closure of the opportunity to submit a revised repayment plan, and suppressed material developments occurring after the filing of the appeal. The Tribunal treated this conduct as lacking candour and as an attempt to delay the process. In view of such concealment and the subsequent closure of the personal insolvency process, the appeal was treated as an exercise in futility.

Conclusion: The appeal was dismissed with costs for want of bona fides and suppression of material facts.

Final Conclusion: The impugned admission order was sustained and the personal insolvency challenge was rejected, with costs imposed on the appellant.

Ratio Decidendi: Where a guarantor is served at the addresses furnished in the guarantee records and otherwise acquires knowledge of the proceedings, a plea of non-service of notice will not invalidate personal insolvency proceedings; suppression of material facts and lack of bona fides furnish an additional ground to refuse discretionary interference.

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