TaxTMI 
TaxTMI 
2024 (9) TMI 326
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....an Chronicle Holdings Limited/ Respondent.1 herein. 2. The gist apropos to the case of the Petitioner is that the Respondent No. 2/Deccan Chronicle Holdings Limited (Corporate Debtor) had availed various credit facilities since 2011 in the form of Fund Based limits which include Working Capital Demand Loan of Rs. 50 crores, after executing necessary documents, from the Financial Creditor to meet its business needs. Pursuant thereto, Respondent No.1 along with others, executed Form Deed of Guarantee dated 29.09.2011 guaranteeing the repayment of the said facilities. 3. It is stated that the Corporate Debtor is the Principal Borrower and Personal Guarantor, stood as guarantors in order to secure the repayment of the financial assistance availed by the Corporate Debtor. The guarantor further undertook to indemnify and keep the lenders indemnified against all loses, damages, costs, claims and expenses whatsoever, which the lenders may suffer, pay or incur by reason of or in connection with any default on the part of the Corporate Debtor. 4. The Financial Creditor annexed the following documents to prove the existence of debt and amount in default: - (a) Copy of Sancti....
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....ion as the cause of action is still subsisting and continuing, as under:- 28.11.2012 Accounts of CD were classified as NPA 24.12.2012 When the Petitioner Bank issued demand notice to the Respondents 24.05.2013 When the Petitioner bank filed OA before the DRT-II Hyderabad 27.08.2020 DRT issued Recovery Certificate in f/o the Petitioner 17.09.2020 Recovery Officer issued Demand Notice u/s 25 to 28 of the RDB Act, 1993 15.12.2020 Petitioner issued Form-B Demand Notice under Rule 7(1) 10. The Petitioner further relied on the ruling of Hon'ble Supreme Court re: Cognizance for extension of Limitation (MA No. 665 of 2021 in SMW(C) No.3/2020, has observed that "(i) in computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021, (ii) In cases where the limitation would have expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limi....
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....stant case, as such this petition is not maintainable before this Tribunal. Further according to Respondent No.1, it is in violation of audi alteram partem, as not only the IRP was appointed but his report was submitted without affording an opportunity to Respondent No.1. (c) According to Respondent No.1. the Form of Guarantee for Advance and Credits, is a bond (as per Section 2(5) of the Indian Stamp Act, 1899) entered into between the Petitioner and 1st Respondent and cannot be considered as evidence as per Section 35 of the Indian Stamp Act, 1899. (d) Though the Petitioner claims to have granted various credit facilities from time to time, in the form of fund-based limits to the 2nd Respondent since 2011, the Petitioner has submitted only the sanction letter dated 29.09.2011 and letter of acceptance for a working capital requirement of Rs. 50 crores. (e) According to Respondent No.1, there is no continuous cause of action as claimed by the Petitioner, since the guarantee provided by 1st Respondent is in the nature of standalone guarantee for the repayment of working capital loan and that the petition is barred by limitation. the limitation period would....
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.... the financial creditor deserves admission or rejection? 17. Before we proceed to decide the point, we feel it is appropriate to refer to the ruling of Hon'ble Supreme Court of India, in Dilip B Jiwrajka vs. Union of India and Ors. Writ Petition (Civil) No. 1281 of 2021 decided on 09.11.2023, wherein Hon'ble Supreme Court, explained the role of the Adjudicating Authority while deciding a petition filed under sections 94 & 95 of IBC, "Section 100(1) stipulates that the adjudicating authority must issue an order within fourteen days of receiving the report, either admitting or rejecting the application filed under Sections 94 or 95, depending on the circumstances. Importantly, the adjudicating authority does not mechanically accept or reject applications based solely on the resolution professional's report. Instead, it must actively engage in a fair process, affording the debtor a fair opportunity to present their case. The adjudicating authority arrives at its determination by considering arguments supported by relevant material particulars. In essence, the adjudicating authority conducts an independent assessment, not solely relying on the resolution profess....
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....Section 94 and 95 of IBC, and it is not necessary for the adjudicating authority to rely solely on the resolution professional's report while deciding the fate of applications under Section 94 or 95 of the IBC and it can conduct its own independent assessment. 22. We therefore on the basis of the above stated legal frame and on the factual matrix of this case, proceed to decide the point. 23. Admittedly, this Tribunal on 05.01.2022 appointed a Resolution Professional and directed him to file his report in terms of Section 99 of IBC, within 10 days from the date of the said order. Subsequently, the Resolution Professional filed his report, inter-alia, recommending for admission of the Petition. Pursuant thereto this Tribunal ordered the resolution professional to furnish a copy of the said report to the personal guarantor and granted opportunity to the personal guarantor to file his objections if any, to the report. In response, the Personal Guarantor filed his objections contending, inter-alia, that the report as filed by the Resolution Professional does not satisfy the requirements envisaged under Section 99 of IBC, besides that the Resolution Professional failed even to....
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....71/202 dated 27.08.2020 also has been issued for a sum of Rs. 79,18,92,485.18, along with costs of Rs. 1,50,000/- towards expenses and future interest. Thus, a total of Rs. 159,91,10,414/- became due and payable by the Corporate Debtor to the Financial Creditor as on 15.12.2021. 26. The Ld. Counsel would further contend that the Demand Notice, dated 15.12.2020 demanding payment of Rs. 159,91,10,414/- has been issued to the Respondent /Personal Guarantor herein, but the Respondents failed to repay the same. Thereafter, the Financial Creditor issued another Demand Notice dated 16.10.2021 to Respondent/Personal Guarantor, which according to the Financial Creditor was duly "served" upon the Respondent/Personal Guarantor, however, no reply has been received from Respondent/Personal Guarantor. Therefore, the contention that the Respondent/Personal Guarantor was served with demand notice in terms of sub-section 4(b) of Section 95 of IBC is not correct. Hence, the present petition is filed. 27. For proper appreciation of the above contentions, we usefully refer herein to Section 95 of IBC. (1) A creditor may apply either by himself, or jointly with other creditors, or throug....
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....aid 'duty' is not a 'mere' formality/procedural but a legal obligation to verify the due compliances/ requirements by the creditor which are mandated in terms of sections 95 to 97 of IBC, more particularly the compliance of sub- section 4 (b) & (c) of Section 95 IBC. Thus, the recommendation of the resolution professional for admission or rejection of the creditor's petition for triggering insolvency resolution process against the personal guarantor must invariably precede the compliance of due verification of the petition filed by the creditor, by the Resolution Professional. 29. In the case on hand since the Ld. Sr. Counsel for the personal guarantor has been vehemently contending that the personal guarantor was not served with the notice of demand mandated under sub-section 4 (b) of section 95 IBC, supra, as such the present company Petition is liable to be dismissed, we bestow our attention on finding whether the present company petition contained the details/documents relating to the compliance of sub section 4 (b) & (c) of section 95 of IBC, by the financial creditor, and what the resolution professional had said in this regard, in his report. 30. As....
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....the Personal Guarantor. 35. There is yet another version of the Company Petitioner in para 10 of the Company Petition as well as in para 3 of Written Submissions filed by the Company Petitioner/ Financial Creditor, wherein it has been contended that the first Demand Notice sent through Speed Post has been avoided by the Personal Guarantor. However, no record to that effect has been placed. Be it as it may, it is clearer than crystal, that there was no service of either first or the second Demand Notice dated 16.10.2021 on the Personal Guarantor/ 2nd respondent even as per the record relied on by the Petitioner. 36. We have also examined the Report filed by the Resolution Professional more particularly on the aspect of service of Demand Notices dated 15.12.2020 and 16.10.2021 purportedly issued by the Company Petitioner/ Financial Creditor to the Personal Guarantor. Admittedly, no proof of service in respect of purported Demand Notice dated 15.12.2020 has been filed by the Financial Creditor and the resolution professional also did not mention about any document confirming service of the said notice. Insofar as the Demand Notice dated 16.10.2021 is concerned, the Resolution Pr....