TaxTMI 
TaxTMI 
2025 (4) TMI 377
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.... 1. Sufficient cause has been shown for condonation of 4 days delay in refiling of the Appeal. Refiling delay condoned. Comp. App. (AT) (Ins.) Nos. 2184, 2228, 2229, 2243, 2259 & 2260 of 2024 1. These appeals by personal guarantors of the corporate debtor M/s. Metrix Healthcare Private Ltd. have been filed challenging the identical order passed by the adjudicating authority dated 03.10.2024, admitting Section 95 application filed by the Indian Bank. Aggrieved by the order impugned, these appeals have been filed by all the appellants who are the personal guarantors of the corporate debtor. 2. It shall be sufficient to notice facts in Comp. App. (AT) (Ins.) No. 2184/2024, for deciding all the appeals: i. Indian bank has extended financial facilities to M/s. Metrix Healthcare Private Limited. Working capital facility as well as FITL was extended by the bank. The appellant has executed personal guarantee deed in favour of bank guaranteeing the repayment. ii. Accounts of the corporate debtor were declared as NPA on 30.07.2019 with effect from 30.04.2019. iii. On 16.07.2020, bank filed an O.A. No.191/2020 before the Debt Recovery Tribunal, Ahmedab....
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....Guarantors to Corporate Debtors) Regulations, 2019 (for short '2019 Regulations') does not provide for necessary documents to be filed hence Regulation 2A is applicable. It is further submitted that the bank had already filed a Section 7 application against the corporate debtor in which application, the adjudicating authority has passed various orders, directing the bank to place on record the account statement of C.C. Limit and FITL accounts of relevant period when default occurred prior to date of NPA of year 2019. It is submitted that in spite of the various orders issued by the adjudicating authority, the bank could not substantiate its claim of amount of Rs.7,42,47,755/- claimed in Section 7 application and ultimately Section 7 application has been withdrawn by the Indian Bank. When the amount which is due on the corporate debtor has not yet been ascertained, there is no question of proceeding with personal insolvency of the guarantors. It is submitted that guarantors have to submit a repayment plan and unless the amount due on the corporate debtor i.e., payable by the guarantors is not ascertained, no repayment plan can be submitted by the personal guarantors. It is submitted....
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....itor.- For the purposes of clause (a) of sub-section (3) of section 7 of the Code, the financial creditor may furnish any of the following record or evidence of default, namely:- (a) certified copy of entries in the relevant account in the bankers' book as defined in clause (3) of section 2 of the Bankers' Books Evidence Act, 1891 (18 of 1891); (b) an order of a court or tribunal that has adjudicated upon the non-payment of a debt, where the period of appeal against such order has expired.]" 9. The rules have been framed namely Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtors) Rules 2019, (for short '2019 Rules') which rules provides for filing of application under Sections 94 and 95 and documents. Rule 7 of 2019 Rules provides for application by a creditor, which is as follows: "7. Application by creditor.― (1) A demand notice under clause (b) of sub-section (4) of section 95 shall be served on the guarantor demanding payment of the amount of default, in Form B. (2) The application under sub-section (1) of section 95 shall be submitted....
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....erials brought by the Indian Bank and gave several opportunities to the bank to bring all relevant materials. It is useful to notice the order dated 30.08.2024, directing the bank to file complete account statement of both the loan accounts with proper calculation sheet of unapplied interest of monthly quarterly basis, whichever is applicable. 14. It is on the record that the bank subsequently could not satisfy the Court about the actual amount which is due and had prayed for withdrawal. Section 7 application was thus permitted to withdrawn on 03.12.2024, which order is as follows: "A withdrawal affidavit has been filed by the applicant bank on 02.12.2024, vide inward diary No.D-8656. The same is taken on record. However, by way of this affidavit it has been stated that since the Form-1 is incomplete and defective, therefore, the applicant wishes to withdraw the present applicant, with a liberty to file a fresh one with better particulars and complete settlement documents. Accordingly, C.P.(IB)/141(AHM) 2024 is dismissed as withdrawn as prayed for." 15. Learned counsel for the appellant has laid much emphasis on the order passed under Section 7 application a....
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....e appeal. It is useful to extract the email received on 21.05.2024 from daughter on behalf of the personal guarantor : "The email received on May 21, 2024 from Marchi Gupta is as under: - "This is in reference to your order date 10/05/2024 Item no. 8 C.P.(IB)/162(AHM)2024. I, Marchi Gupta (elder) daughter of Yogesh Gupta want to bring some facts in your kind notice that my father Mr. Yogesh Gupta is presently under judicial custody in a false case hearing of which is scheduled in next month and in his absence I am unable to submit any resolution plan. Therefore, kindly allow me time. Further I want to bringing in your kind notice that bank has auctioned our 4 properties and approximately realised Rs.6.00 cr. Out of their total dues of Rs.7.52 cr. apart from it this one property valued at Rs.1.66 cr. is in bank's possession under securitisation act which itself is sufficient to meet out the bank dues. Therefore, I request you to kindly allow us two months time. After consulting my father we will submit a resolution plan. Marchi Yogesh Gupta 9825912222" 18. RP in the Report, although has noticed the realisatio....
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.... reason which would militate against accepting the submission is that the provisions of Section 99 do not as such implicate any adverse civil consequences particularly if those provisions are read in the manner in which we now propose to elucidate. " 20. The law is well settled by the Hon'ble Supreme Court that adjudicatory functions of the adjudicating Authority commences under Section 100 after the submission of the Report. It was further held that adjudicating authority has to conduct an independent assessment not solely relying on the RP's Report to decide the fate of application. In the present case, adjudicating authority has not carried any assessment which is clear from the order of the adjudicating authority. In paragraph 16, adjudicating authority had made following observation referring to the report of the IRP and in paragraph 17, the adjudicating Authority has recorded its conclusion and directed for admission of application. Paragraphs 16 & 17 are as follows: " 16. Moreover, From the report of IRP, it is clear to us that : i. IRP has recommended to accept the application for the reason as stated in the report dated 23.05.2024. ii. T....
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....vide Order dated 10.05.2024, is directed to cause a public notice published on behalf of the Adjudicating Authority within 7 days of passing this Order on the website of the NCLT Ahmedabad Bench, inviting claims from all Creditors, within 21 days of such issue The notice under Sub Section (1) of Section 102(2) shall include : - a) details of the order admitting the application; b) particulars of the resolution professional with whom the claims are to be registered; and c) the last date for submission of claims. III. The publication of notice shall be made in two newspapers, one in English and other in Vernacular which have wide circulation in the State where the Corporate Debtor and Personal Guarantor resides. The Resolution Professional shall furnish two spare copies of the notice to the Registry for the record. IV. The Resolution Professional in the exercise of the powers conferred under Section 104 shall prepare a Est of creditors on the basis of a) the information disclosed in the application filed by the debtor under Sections 94 or 95 as the case may be, and a) the information disclosed in the application filed by the debto....
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.... compliance with the Code of Conduct provided under Section 208 of IBC, 2016. IX. The Resolution Professional shall submit his periodic reports before this Tribunal, every 30 days. X. The Registry is directed to communicate a copy of order, report and application within seven working days and upload the same on the website immediately after the pronouncement of order." 21. The adjudicating authority has adverted to the issue of limitation in paragraph 14 and has observed in paragraph 15, that when default is committed by principal borrower surety are jointly and severally liable to creditor. In the present case, it was admitted fact that under SARFAESI bank has already realised Rs.5,92,92,750/- from the sale of the assets and by email on behalf of the personal guarantor, it was communicated that one property which is in possession of the bank is sufficient to liquidate the entire debt. The above relevant issue which was raised on behalf of the personal guarantors was neither adverted by the RP in its report nor adverted by the adjudicating authority in the impugned order. There is a difference between the scheme and under Section 7 of the IBC and Section 100. S....