Personal guarantor proceedings fail when guarantee documents and invocation are absent and jurisdictional facts are misrepresented.

Proceedings against an alleged personal guarantor under the Insolvency and Bankruptcy Code could not be sustained where the record did not disclose any deed of guarantee or its invocation, and the application proceeded on incorrect jurisdictional facts. The loan and assignment records described the person as a co-borrower, while the assignment documents recorded that there were no guarantors. The demand notice and Section 95 application also omitted any guarantee documentation. As the deed of guarantee and its invocation were foundational to invoking personal guarantor jurisdiction, the order appointing the Resolution Professional was vitiated by misrepresentation of material facts and was set aside.

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Issues: Whether the order appointing the Resolution Professional in proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016 could be sustained when the record did not disclose any deed of guarantee or invocation of guarantee and the application was found to have proceeded on incorrect jurisdictional facts.

Analysis: The Appellant was described in the loan and assignment records as a co-borrower, while the relevant assignment documents recorded that there were no guarantors. The demand notice and the application under Section 95 did not disclose any deed of guarantee or notice invoking a guarantee. The subsequent rectification proceedings before the Adjudicating Authority also recorded dissatisfaction with the manner in which the matter had been represented and acknowledged that incorrect facts had been placed before it. Since the deed of guarantee and its invocation were foundational to the initiation of proceedings against a personal guarantor, the findings recorded by the Adjudicating Authority were held to have been vitiated by misrepresentation of material jurisdictional facts.

Conclusion: The impugned order appointing the Resolution Professional was unsustainable and was set aside.

Ratio Decidendi: Proceedings initiated against a person as a personal guarantor under Part III of the Insolvency and Bankruptcy Code cannot be sustained where the foundational documents of guarantee and its invocation are absent and the jurisdictional basis is established to have been misrepresented.

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