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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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