Personal guarantor liability under IBC upheld where guarantee documents were admitted and Section 99 report was not fatal.

Section 95 proceedings against a personal guarantor were discussed on the basis that admitted signatures on the loan sanction letter, loan agreement and guarantee documents established guarantor liability, especially where the account had become NPA and default was undisputed. Section 99 of the Insolvency and Bankruptcy Code, 2016 was treated as facilitative and recommendatory, so its absence did not vitiate the proceedings on these facts. The plea that the guarantee was executed under duress was rejected as a belated afterthought, and later assertions about ouster from management did not displace the liability arising from the guarantee documentation.

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Issues: Whether the Section 95 proceedings against the personal guarantor were vitiated for want of a report under Section 99 of the Insolvency and Bankruptcy Code, 2016, and whether the appellant could avoid liability on the plea that he was not a valid guarantor or that the guarantee documents were executed under duress.

Analysis: The appellant's signature on the loan sanction letter, loan agreement and letter of guarantee was admitted, and those documents expressly described him as a personal guarantor. The account had been declared NPA, default was not disputed, and the liability flowing from the guarantee documentation was therefore sufficiently established. Section 99 of the Insolvency and Bankruptcy Code, 2016 was treated as facilitative and recommendatory in nature, meant to aid the Adjudicating Authority in reaching a decision on admission or rejection of the Section 95 application, and the absence of the report did not vitiate the proceedings in the facts of the case. The plea of duress was rejected as a belated afterthought, and the later proceedings based on the alleged ouster from management did not displace the admitted liability arising from the guarantee documentation.

Conclusion: The challenge to the admission of the Section 95 application failed, and the liability of the appellant as personal guarantor was upheld.

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