2018 (3) TMI 657

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..... Veesons Energy Systems Pvt. Ltd. ("Corporate Debtor") given personal guarantee and mortgagor of collatera securities of his assets with the Appellant- State Bank of India ("Financial Creditor") against the facilities availed by the 'Corporate Debtor'. In view of the personal Guarantee given by Mr. V. Ramakrishnan (1st Respondent), he comes within the meaning of 'Personal Guarantor' as defined under sub-section (22) of Section 5 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "I&B Code") 2. The State Bank of India ("Financial Creditor") invoked its right under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (hereinafter referred to as "SARFAESI Act, 2002") again....

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....the 'Corporate Debtor' any of its assets or any legal right or beneficial interest therein. 6. In view of the provisions of 'I&B Code', Section 140 of the Indian Contract Act, 1872 and the decision of the Hon'ble High Court of Madras, the Adjudicating Authority allowed the Interlocutory Application preferred by the 'Personal Guarantor', and restrained the Appellant- State Bank of India ('Financial Creditor') from proceeding against the 'Personal Guarantor' till the period of 'Moratorium' is over. 7. Learned counsel for the Appellant submits that the order of 'Moratorium' will not affect the assets of the 'Personal Guarantor'. On the other hand, according to counsel for the Respondents, in view of sub-section (1)(b) of Section 14 and sub-s....

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....g has been initiated against the 'Corporate Debtor', if simultaneous proceeding is to be initiated against the 'Personal Guarantor' for bankruptcy proceedings, an application relating to the 'Insolvency Resolution or Bankruptcy' of a 'Personal Guarantor' of such 'Corporate Debtor' require to be filed before the same Adjudicating Authority (National Company Law Tribunal) hearing the 'Insolvency Resolution Process' or 'Liquidation Proceedings' of a 'Corporate Debtor'. This is, as apparent from sub-sections (2) & (3) of Section 60 of the 'I&B Code', which is quoted below: - "60. Adjudicating Authority for corporate persons. ─ ................ (2) Without prejudice to sub-section (1) and notwithstanding anything to the contrary containe....

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....II of this Code for the purpose of sub-section (2). 14. Section 14 of the 'I&B Code' empowers the Adjudicating Authority to declare 'Moratorium' for prohibiting all of the matters as stipulated thereunder and quoted below: "14. Moratorium. ─ (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the....

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....edings against the 'Corporate Debtor' are prohibited from proceedings, in terms of clause (b) of sub-section (1) of Section 14 of the 'I&B Code', transfer, encumbrance, alienation or disposal of any of its assets of the 'Corporate Debtor' and/ or any legal right or beneficial interest therein are prohibited. Clauses (c) & (d) of sub-section (1) of Section 14 of the 'I&B Code' prohibits recovery or enforcement of any security interest created by the corporate debtor in respect of its property including the property occupied by it or in the possession of the 'Corporate Debtor'. 16. Sub-section (1) of Section 31 relates to 'approval of resolution plan', which reads as follows: - "31. Approval of resolution plan. ─ (1) If the Adjudicat....