TaxTMI 
TaxTMI 
2025 (9) TMI 136
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....s Cooperative Bank Limited & Anr. By the impugned order, adjudicating authority after considering the Report of Resolution Professional (RP) admitted Section 95 application by passing an order under Section 100 of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as the 'IBC' or the 'Code'). Aggrieved by the order admitting Section 95 application, this appeal has been filed by the personal guarantor. 2. Brief facts of the case necessary to be noticed for deciding the appeal are: i. Cosmos Cooperative Bank Limited, the financial creditor granted various credit facilities to the corporate debtor M/s. Dilip Chabria Design Private Ltd. ii. Cash credit limit of Rs. 16 crore and term loan facilities of Rs. 22 crore as on 25.06.2014 was sanctioned by the financial creditor. The repayment of the said facilities among the others was secured by personal guarantee by the deed of guarantee dated 28.07.2014. iii. Existing facilities were renewed and deed of guarantee was issued on 29.09.2015 and further the deed of guarantee was issued on 26.11.2015. iv. The above guarantee issued in 2014-15 was issued by personal guarantors, which did not....
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.... Corporate Insolvency Resolution Process (CIRP) of the corporate debtor by the appellant. xii. It was pleaded that appellant was informed by the management that additional capital was required for operation of the company for which they approached the bank for additional funding of Rs. 44 crore for which the appellant was requested to give a guarantee. It was pleaded that no amount was disbursed by the bank, hence there is no valid claim against the personal guarantor, no amount was disbursed for which guarantee was obtained from the appellant. After serving notice under Rule 7, the bank filed a Section 95 application being C.P. No.510/2021 on 07.12.2020. xiii. Appellant has also filed an arbitration application under Section 9 of the Arbitration and Conciliation Act, 1996, on 26.08.2021. Adjudicating Authority appointed the RP. Appellant also filed an I.A. in the company petition seeking a declaration of deed of guarantee 02.03.2016 as null and void. Reply was also filed by the bank to the IA. The RP submitted report under Section 99 on 22.02.2020 recommending admission of Section 95 application. Appellant filed its response to the Report. Parties were heard by a....
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.... its claim in CIRP of the corporate debtor. Bank has proceeded to initiate proceeding only against the appellant, whereas, there are other directors, personal guarantors of the corporate debtor, with whom the bank has not proceeded with. There is no evidence of any legally enforceable debt against the appellant. 5. Learned counsel for the bank refuting the submissions of the appellant submits that appellant admittedly has execute a personal guarantee dated 02.03.2016, which guarantee clearly covered the facilities agreed to grant and/or continue to grant and/or granted to the borrower. The guarantee mentions aggregate sum of Rs. 44 crore which was facilities already granted. The guarantee thus clearly cover the facilities already extended to the borrowers i.e., the corporate guarantee. It is on the record that Rs. 22 crore term loan was granted and disbursed to the borrower with cash credit limit of Rs. 21 crore and further credit of Rs. 1 crore. Loan agreement was also executed on 02.03.2016, which in paragraph 5 has referred to credit facilities aggregating to Rs. 44 crore. The said loan agreement contained the repayment/prepayment of the term loan, which repayment was to begi....
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....ebtor availed the various credit facilities from the bank. The term loan of Rs. 22 crore with cash credit limit of Rs. 21 crore, the said facilities were obtained in the year 2014-15 for which guarantee was given on 28.07.2014 and further guarantee deeds were given on 29.09.2015 and 26.11.2015 by other personal guarantors including Dilip Chabria. The appellant gave guarantee subsequently on 02.03.2016 to secure the repayment of debt of the bank. 8. The principal submission which has been advanced by the appellant is that since no disbursal of credit facility of Rs. 44 crore was extended by the bank subsequent to the issuance of guarantee on 02.03.2016 by the appellant there is liability or debt on the appellant nor any default can be imputed to the appellant since no disbursal was made after 02.03.2016. The bank has filed all relevant deed of guarantee including deed of guarantee dated 02.03.2016 as well as other document executed on 02.03.2016 including the loan agreement dated 02.03.2016. There is no dispute that the earlier guarantee was given by Dilip Harikishin Chabria and other directors of the corporate debtor in 2014-15 and it was for the first time that appellant was pa....
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....dit sum of Rs. 44 crore. Clause 1 of the guarantee deed reads as follows: "1. In consideration of the Bank at the request of the Borrower/s, having agreed to grant and/or continue to grant and/or granted to the Borrower/s banking facility/ies or accommodation for a sum and/or for an aggregate sum of Rs. 44,00,00,000/-pursuant to the sanction letter dated and punctually repay/pay the aforesaid amount/s together with further interest, The Borrower/s shall duly costs, charges and expenses and all other monies, whatsoever stipulated in or payable under the Banking facility/ies and/or other security documents, and perform and comply with all other terms, conditions and covenants contained in the loan document and other security documents. In the event of any default on part of the Borrower/s in payment/re-payment of any of the monies referred herein above, or in the event of default on the part of the Borrower to comply with or perform any of the terms, conditions and covenants contained in the Loan document or other security document, the Guarantor/s shall, upon demand, forthwith pay to the Bank without demurall the amount/s payable by the Borrower/s under the aforesaid Bankin....
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....atement. The submission of the appellant that the said guarantee was given by the appellant only on the representation that guarantee is given by the appellant for disbursement of Rs. 44 crore which was to be made after execution of the deed of guarantee cannot be accepted. The guarantee by a personal guarantor can be issued for a consideration which has already been received by a borrower or to be received by borrower and in the facts of the present case the facility of Rs. 44 crore has already been received by the borrower which is amply proved. The submission of the appellant that since no disbursement was made on Rs. 44 crore subsequent to the execution of the personal guarantee by the appellant hence there is no liability on the appellant cannot be accepted. We have noticed the loan agreement which clearly also contains the same expression that the bank at request of the borrower having agreed to grant and/or continue to grant and/or granted to the borrower. Thus, the loan agreement subsequently mentions cash credit of Rs. 21 lakhs term loan of Rs. 22 crores and letter of credit of Rs. 1 crore totalling to Rs. 44 crores thus clearly refers to facilities granted to the borrower....
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....security of Rs. 44 crore was also issued by corporate debtor and other personal guarantors which was also signed by the appellant. Sufficient material was brought on the record by the bank to prove that guarantee dated 02.03.2016 was in consideration of the facilities granted by the bank to the corporate debtor aggregating to Rs. 44 crore. 17. We thus are not persuaded to accept the submission of the appellant then there being no disbursal after 02.03.2016 of Rs. 44 crore, the appellant is not liable for any debt. Appellant having given personal guarantee on 02.03.2016, which guarantee also extended facilities granted by the bank to the borrower, which facilities were aggregating to Rs. 44 crore as on the date. 18. The submission of the appellant that management has represented the appellant that bank shall agree to give further credit of Rs. 44 crore for starting new business and appellant gave guarantee only on the representation that a new business shall be started by the corporate debtor with fresh financial credit cannot be accepted. The execution of the guarantee on 02.03.2016 is not denied by the appellant. The guarantee deed with other documents have to be read in the....
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....be considered and decided in accordance with law. 24. We, thus do not find any ground raised by the appellant warranting any interference with the order of the adjudicating authority admitting Section 95 application. I.A. No. 4524 of 2025 In Company Appeal (AT) (Insolvency) No. 955 of 2025 25. IA No.4524 of 2025 has been filed by the Applicant/Appellant praying for following reliefs:- "(a) Take on record the Settlement Agreement dated 01.08.2025 executed between the Appellant and Respondent No.1; (b) Pass an order disposing of the present Appeal in terms of the Settlement Agreement; (c) Pass directions for closure of the insolvency resolution process initiated pursuant to the order dated 01.07.2025 in CP (IB) No. 510 (MB) of 2021 before the Hon'ble National Company Law Tribunal, Mumbai; (d) Pass such other & further order(s) as this Hon'ble Appellate Tribunal may deem fit and proper in facts and circumstances of the case." 26. The Applicant's case is that after filing of the present Appeal challenging the order dated 01.07.2025 admitting application under Section 95 filed by Cosmos Co-operative Bank Ltd. against the Appellant, t....
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....ssional has erroneously admitted the claim of Income Tax Department whereas the crystallised demand has already been set aside by the Commissioner of Income Tax (Appeals) vide order dated 19.12.2018 which was upheld by the High Court. In paragraph 15 of the rejoinder, details of the orders by which demand of different assessment years have been set aside have been mentioned. It is further submitted that no demand/ assessment could have been initiated during interim Moratorium period. It is submitted that this Tribunal under the inherent powers can permit CIRP to be withdrawn. 29. Counsel for the Bank does not dispute the settlement with the Appellant, however, it is submitted that under Settlement, payments are required to be paid by the Appellant in phased manner and in event, the default is committed by the Appellant, there shall be liberty to Bank to initiate proceeding in accordance with law. 30. We have considered the submissions of the Counsel for the parties made in the IA No.4524 of 2025 as noted above. 31. Section 95 application filed by the Cosmos Co-operative Bank Ltd. was admitted by order dated 01.07.2025 against which Appeal was filed. Appellant was initially....
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....llant has referred to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019. It is submitted that under sub-regulation (5) of Regulation 7, the Resolution Professional shall verify each claim as soon as it is received and prepare a list of creditors within 30 days from the date of public notice. It is further submitted that the Resolution Professional shall modify the amounts of claims admitted, after he comes across additional information. Regulation 7(5) and 7(7) is as follows:- "7. Submission and verification of claim.- (5) The resolution professional shall verify each claim as soon as it is received and prepare a list of creditors under sub-section (1) of section 104 within thirty days from the date of public notice. (7) The resolution professional shall modify the amounts of claims admitted, including the estimates of claims made under sub-regulation (6), as soon as may be practicable, after he comes across additional information warranting such revision, till the approval of a repayment plan by the creditors." 34. Regulation 9 provides for 'list of creditors'. Regulation....