TaxTMI 
TaxTMI 
2024 (11) TMI 297
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.... Bankruptcy Process against the Personal Guarantor. Aggrieved by the Order, this Appeal has been filed by the Appellant, the Personal Guarantor. 2. Brief facts necessary to be noticed for deciding the Appeal are: i. An Application under Section 95(1) was filed by the State Bank of India (SBI) against the Appellant being C.P. (IB) No. 54(KB)/2021. The Adjudicating Authority vide Order dated 03.08.2021, appointed the Respondent, Prashant Jain as RP. ii. The RP after interacting with the Personal Guarantor submitted a Report under Section 99 recommending initiation of Insolvency Proceeding against the Personal Guarantor. iii. Adjudicating Authority passed an Order on 16.06.2022, admitting Section 95 Application. iv. The Appellant aggrieved by the Order dated 03.08.2021, appointing the RP has filed Comp. App. (AT) (Ins.) No. 807/2021 in this Tribunal. In the Appeal, Notices were issued, but no Interim Order was passed. v. Against the Order dated 16.06.2022, admitting Section 95 Application, Appellant also filed Comp. App. (AT) (Ins.) No. 740/2022. After admission of Section 95 Application RP issued Public Notice on 21.06.2022. Claims were....
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....l in Company Appeal (AT) (Insolvency) No 740 of 2022 and Company Appeal (AT) (Insolvency) No 807 of 2020. 2 The Civil Appeals are accordingly dismissed. 3 Pending applications, if any, stand disposed of." xi. In the above background of the fact that Adjudicating Authority has passed the Impugned Order dated 10.04.2024. Adjudicating Authority after noticing the provisions of Section 114, 115 & 121 of the IBC came to the conclusion that when no repayment Plan is proposed, the provisions of Section 114 & 115 is to apply and Creditors are entitled to file an Application for Bankruptcy under Chapter IV. In Para 7, following observations and directions have been made by the Adjudicating Authority: "7. Since, we have failed to decipher any specific provision contemplating a situation where no repayment plan is proposed, we consider it fit to apply provisions under Section 114 and Section 115 that envisages a situation when an Adjudicating Authority rejects a repayment plan under Section 114(1) and Section 115(2), the creditors are entitled to file an application for bankruptcy under Chapter IV. We thus pass the following Orders: - i. We thus al....
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....documents were provided by the Appellant nor any Repayment Plan could be prepared. When no Repayment Plan has been submitted, the process is akin to rejection of the Repayment Plan, hence further steps have to be taken by the Adjudicating Authority. Rejection of Repayment Plan and non-submission of Repayment Plan has to be kept on same footing so as to take further steps. The Personal Guarantor who failed to cooperate so as to prepare a Repayment Plan cannot be heard in questioning the steps taken by the Adjudicating Authority under Section 115. It is submitted that when there is no approved of Repayment Plan, the Creditors are entitled to file an Application for Bankruptcy under Chapter IV, the Order of the Adjudicating Authority for giving liberty is in accordance with Section 115(2), which is statutory entitlement of the Creditors. Even if no liberty would have been granted by Adjudicating Authority in the Impugned Order, right of Creditor to file an Application for Bankruptcy under Chapter V is fully provided for in Section 115(2). It is submitted that all Reports which were required to be submitted by RP under Section 99 were already sent to the Personal Guarantor and after co....
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....u vide email dated 07.07.2022, it is brought to your kind attention that I am making the necessary arrangements to provide the necessary document, however, in order to do so certain clarifications are sought from your end 1. Kindly explain as to what is meant by the term excluded assets and excluded debts. 2. With respect to the guarantees, I would like to state that no guarantees had been issued by me for any of my debt or otherwise of anybody else's debt. 3. With regard to the financial statements for the business owned, it is submitted that the Company Ess Dee Aluminium Ltd is already under liquidation and the financial statements and relevant documents have already been provided. Further, with regard to the Creditors Claim it is stated that I have not executed or am aware of any debt to any of the banks on my personal capacity, It is submitted that I would require the documents or the agreements on the basis of which you have indicated the Claims. With regard to the documents, due to some personal difficulty, I have been unable to collate and arrange for providing the same, therefore I kindly request you to provide me with a slig....
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....nvening of the Meeting of Creditors or conduct of Meeting could take place. Section 111 provides for approval of Repayment Plan by Creditors, which is as follows: "111. Approval of repayment plan by creditors.-The repayment plan or any modification to the repayment plan shall be approved by a majority of more than three-fourth in value of the creditors present in person or by proxy and voting on the resolution in a meeting of the creditors." 12. Section 112 provides for Report of Meeting of Creditor on Repayment Plan and Section 114 contemplates Order of Adjudicating Authority on Repayment Plan, which is as follows: "114. Order of Adjudicating Authority on repayment plan.-(1) The Adjudicating Authority shall by an order approve or reject the repayment plan on the basis of the report of the meeting of the creditors submitted by the resolution professional under section 112: Provided that where a meeting of creditors is not summoned, the Adjudicating Authority shall pass an order on the basis of the report prepared by the resolution professional under section 106. (2) The order of the Adjudicating Authority approving the repayment plan may also ....
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....ny Repayment Plan to be finalised by the RP. 17. From the facts and sequence of the event which has been brought on the record, it is clear that at no point of time, subsequent to receiving request from the RP for submitting a Repayment Plan, Appellant raised any grievance or filed any proceeding before the Adjudicating Authority, raising his grievances and grounds for not being able to submit a Repayment Plan. The Appellant kept silence for years together and when consequential Order under Section 115 has been passed by the Adjudicating Authority, he is raising grievance of not being heard by the Adjudicating Authority. 18. Now we come to the Regulation 19 on which much reliance has been placed by the Counsel for the Appellant to contend that even the Application I.A. 449/2024 was required to be served on the Appellant. Regulation 19 provides as follows: "19. Filing with the Adjudicating Authority.-(1) The resolution professional shall file the repayment plan, as approved by the creditors, along with the report mentioned in sections 106 or 112, as the case may be, with the Adjudicating Authority on or before completion of one hundred and twenty days from the resolut....