AI Drafter 
TaxTMI 
TaxTMI 
2020 (9) TMI 263
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....N ORDER (Order of the Court was delivered by R.HEMALATHA, J.) Both the writ petitioners are connected to M/s.Everon Castings Private Limited. The petitioner, Mr.Rajesh in WP.No.31140 of 2019 is the founder director of the company and the petitioner in WP.No.31432 of 2019, Mrs.Dhanalakshmi is a third party guarantor who offered one of the collateral securities for the company to avail credit facilities from State Bank of India. In brief, the company, M/s.Everon Castings Pvt. Ltd. (hereinafter referred to as Corporate Debtor) was promoted in 2008. It was a manufacturing unit for large size steel castings. By 2010, it commenced the operations and was supplying big fortune 500 companies and had a strength of 300 employees. According to....
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.... was held disqualified under Section 29A (g); d) Consequent to the above, direct the Resolution Professional and COC to consider the Resolution Plan submitted by these applicants jointly and severally afresh without being influenced by their previous biased decisions; e) Declare the decision of the 2nd respondent to treat the Corporate Debtor as an NPA on 26.03.2018 as being illegal; f) Such other orders in the interests of justice. But the petition was dismissed. One of the important reliefs sought was to declare the decision of the State Bank of India to treat the Corporate Debtor as Non-Performing Asset on 26.03.2018 as illegal. Another plea to exclude the period of alleged delay (120 days) on the part of In....
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....n Castings Pvt. Ltd. (the Corporate Debtor). She had pleaded that the declaration of Non Performing Asset when the CIRP was in process, is illegal and that therefore all proceedings including the sale notice be declared void ab initio. Her contention also was that she was in no way connected with the decision making process of the company (Corporate Debtor) and therefore, this aspect also needs to be considered by this Court. 4. On the part of both the petitioners, the learned Senior counsel Mr.N.L.Rajah assisted by Mr.E.Jayashankar made the following submissions: (a) The financial creditor (State Bank of India) who is the common respondent in both the petitions was without any jurisdiction, while proceeding against the Corporat....
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....tcy Code, 2016, would not apply to a personal guarantee of a Corporate Debtor as settled by the Hon'ble Apex Court in State Bank of India vs. V.Ramakrishnan reported in 2018 (9) SCALE 597. Thus their contention was that the assets of the surety are separate from those of the Corporate Debtor and therefore the recourse against the guarantor was outside the liquidation proceedings and had no restrictions under Insolvency and Bankruptcy Code, 2016. It is their further contention that Section 14 clearly applies only to the security interests over the assets of the Corporate Debtor. 7. It was also pointed out by them that the declaration of Non Performing Asset of the account of the Corporate Debtor during the moratorium was challenged in....
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.... 10. This contention raises a major question as to whether creditors can independently proceed against the guarantor. The Hon'ble Apex Court had laid to rest this argument about whether the moratorium on the Corporate Debtor will apply to the guarantor or not. It has categorically held that moratorium does not apply to the personal guarantor. However, unlike in most of the cases, in the instant case, the guarantor is not directly involved in the management of the company. She is a third party. It is also observed in the instant case that the securitization notice under Section 13 (2) is dated 13.02.2019 and is not an independent notice. It is not only for the guarantors property when the appeal of the company under NCLAT was pending, b....
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....dated 09.01.2019 (and not 23.01.2019 as mentioned in the writ petition) and the same has been closed after verification of records submitted by the IRP / RP. He would further contend that the 4th respondent had also directed the RP to follow the liquidation rules. This writ petition is also infructuous for the reason that the NCLAT on an appeal preferred by the petitioner in this writ petition had disposed of both the petitions filed by him against the orders of NCLT with the following observation. "In view of the aforesaid decision, we are of the view that the liquidator should act in terms of the aforesaid directions of the Appellate Tribunal and take steps under Section 230 of the Companies Act. If the members of the 'Corpor....