TaxTMI 
TaxTMI 
2025 (12) TMI 1256
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....authority by the impugned order has admitted the Section 95 application and initiated personal insolvency resolution process against the appellant. Aggrieved by the order, these appeals have been filed. 2. The pleadings and facts in above appeals being common, we refer to the facts from Comp. App. (AT) (Ins.) No. 61/2025 'Neeta Saha' Vs. 'Assets Care & Reconstruction Enterprise Ltd.': i. The corporate debtor M/s. Saha Infratech Pvt. Ltd. was extended term loan facility of Rs. 90 crore by ECL Finance Ltd. Amounts were disbursed between 07.11.2017 and 24.10.2019. The facility was granted @ 18.75% p.a. payable quarterly. There being default on part of the principal borrower, notice of default was issued by financial creditor on 02.04.2019 and 26.09.2019. ii. On an application filed by Homebuyers, Corporate Insolvency Resolution Process (CIRP) against the corporate debtor commenced on 28.02.2020. iii. A loan recall notice dated 23.03.2020 was issued by financial creditor. The ECL Finance Ltd. by Assignment Agreement dated 27.03.2020 assigned the debt along with all underlying securities guarantees etc. in favour of the Asset Care & Reconstruction Enterpris....
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....ant challenging the impugned order raised following submissions: I. Application under Section 95 is not maintainable as it is founded on the loan recall notice 23.03.2020 when CIRP in respect of the principal borrower had already commenced on 28.02.2020 and moratorium under Section 14 of the IBC was enforced. II. The alleged default occurred only upon expiry of 7 days of the recall notice i.e., on 31.03.2020 which default was during 10A period, hence application under Section 95 is hit by bar under Section 10A and proceeding under Section 95 are not sustainable. III. The financial creditor has mis declared the quantum of debt by claiming Rs. 291,61,30,615/- from the personal guarantors, whereas, only amount of Rs. 55,06,46,056/- has been admitted in CIRP of the principal borrower and debt cannot be more than admitted claim. It is further submitted that financial creditor has supressed that the amount of Rs. 30 crore was paid by another guarantor M/s. Kalptaru Housing Pvt. Ltd. pursuant to which a No-Objection Certificate (NoC) dated 30.12.2022 was issued in favour of co-guarantor. A further recovery of Rs. 10 crore was made from co-guarantor. It is pleade....
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....rore for sale of immovable property of co-guarantor as alleged there is not receipt of Rs. 5 crore for sale of immovable property at an e- auction. According to own case of the appellant, there is debt outstanding of more than Rs. 1 crore, hence no illegality can be found in admission of Section 95 application on the aforesaid ground. It is submitted that NoC was issued to Kalptaru Housing Pvt. Ltd. on basis of settlement to release the charge and the amount received, applied to pro-rata basis to the revolving facility Rs. 13.33 crore was credited. Amount received form corporate guarantor - M/s. Kool Interiors Pvt. Ltd. i.e., only amount of Rs. 4.15 crore has been applied to the revolving facility on pro-rata basis. Thus, the submission of the appellant that there is no due, is incorrect. More so, what is the actual amount due on the personal guarantor is the issue which has to be examined at the time of submission of repayment of plan and that cannot be a ground for not admitting Section 95 application. It is submitted that there is no error in the order admitting Section 95 application warranting any interference by this Appellate Tribunal. 6. We have considered the subm....
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....he present is the case, where notice of default was issued to the corporate debtor in the year 2019 and initiation of CIRP against the corporate debtor and the moratorium under Section 14 of the IBC does not preclude the financial creditor to initiate action under Section 95 against the personal guarantor. The personal guarantee issued by personal guarantor was invoked by notice dated 14.03.2022, thus invocation against the personal guarantor have taken place on 14.03.2022, the same was well within jurisdiction of the financial creditor and cannot be said to hit by moratorium under Section 14. We thus do not find any substance in the submission of the appellant that proceeding under Section 95 are in any manner hit by Section 14 of the IBC. 9. The second submission which has been pressed by the appellant is that loan recall notice issued on 23.03.2020 required payment within 7 days, hence the default could have occurred only on 31.03.2020, which date of default was covered under Section 10A and the proceeding under Section 95 against the personal guarantor are hit by Section 10A, default having been taken place under 10A period. The present is a case, where invocation of guarant....
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....6. On the basic principle of statutory interpretation, the provision of section 10A is capable of only one meaning that is suspension of initiation of CIRP was only for a corporate debtor. Had the Legislature intended suspension of initiation of CIRP against the personal guarantor also, similar amendment was also required to be made in Chapter III of Part III of the Code. The Legislature is presumed to be aware of consequences of statutory provision especially consequences of amendment made in the statute. Whether the suspension of insolvency resolution process has to be for corporate debtor and also for individuals including personal guarantor is the legislative policy which policy has to be looked into from the amendment brought in the Code by insertion of section 10A. 17. We are, thus, unable to accept the submission of learned counsel for the appellant that suspension of CIRP shall also to be accepted for personal guarantor as was provided for the corporate debtor. The statutory scheme does not contain any indication that CIRP shall also remain suspended for personal guarantor for any default between March 25, 2020 to March 24, 2021 therefore, submission of learned cou....
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....e guarantor an amount of Rs. 4.50 crore has been applied to the revolving facility again on pro-rata basis. The adjudicating authority already in paragraph 17 noticed the submission of the personal guarantor and has observed that exact calculation of the amount of debt can be given in repayment plan by the personal guarantors. In paragraph 17 of the impugned order, following has been observed by the adjudicating authority: "17. It is not the case of the PGs that they had repaid the amount of debt or are in a position to adduce any of such evidences as are provided in Sec. 99(2) of IBC, 2016 to prove the repayment of the debt. As far as the issue of difference between the amount of debt defaulted to be repaid by the Principal Debtor ad allegedly defaulted to be repaid by the Personal Guarantors is concerned, in the present proceedings we need to see that whether the amount of debt is more than threshold limit of Rs. 1 Crore amount. It is not in dispute that admittedly the defaulted amount is more than 1Cr. As far as the exact calculation of the amount of debt is concerned, the Personal Guarantors can give the same in Repayment Pla. While submitting the Plan, the Guara....