2026 (4) TMI 76

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rporate Debtor. 3. Brief facts precisely to be noticed for deciding these two appeals are as follows: - (i) The Appellant herein, gave a personal guaranty in favour of the Financial Creditor on 23.12.2009 in respect of a credit facility sanctioned to M/s. GVS Infra and Industries Private Limited for an amount of Rs. 100 crores. The accounts of the Corporate Debtor was declared as Non-Performing Asset (NPA). A notice was issued under Section 13(2) by the Financial Creditor dated 31.12.2011, after declaring the account as NPA. The notice was addressed to the Corporate Debtor and the Personal Guarantors, on account of the amount having not been paid, a proceedings was initiated before the Debt Recovery Tribunal (DRT) by the Financial Creditor against the Corporate Debtor as well as against the Personal Guarantors. In which proceedings the decree was passed by the DRT on 26.02.2019 and a Recovery Certificate was issued on 19.03.2019. After the aforesaid proceedings a Section 95 application was filed against the Appellant after issuing demand notice in Form-B, being CP No.57/95/HDB/2022, which proceedings were withdrawn with a liberty to file a fresh by the Financial Credito....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the entire proceedings are vitiated. 7. Third submission made by the Ld. Counsel for the Appellant is that the RP has sent notice on 04.04.2024 under Section 99(2) of the IBC, which is claimed to be served on 06.04.2024. The RP in support of his submission has only filed the tracking report of the postal department, which does not indicate as to at which address the notice has been dispatched when no postal receipt was filed to show as to at which address notice was dispatched, the service of notice by RP was also not a proof and cannot be a basis for admission of Section 95 application. 8. Lastly, the Ld. Counsel for the Appellant submits that, the material with regard to service at Masab Tank was brought in the year 2024 and hence, the RP has not applied his mind to correct address of the Appellant and also committed error in not giving opportunity to the Appellant to file objection to the report, which has vitiated the entire proceedings. The Ld. Counsel for the Appellant while elaborating his submissions submitted that, a proof regarding Amba Gardens address service was brought after the RP has submitted the report. 9. We have considered the submissions of the Ld. Cou....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....or as well. We thus are of the view that and it is not shown before us that the decree passed by the DRT has been set aside or is not operative as on date. The debt by the DRT is staring in the face of the Appellant, it is not open for the Appellant to contend that personal guarantee was never invoked. 12. Coming to the second submission of the appellant that he was not served with the demand notice, the very initiation of proceedings is vitiated the submission of the Appellant is that, he has been residing at Amba Gardens address of Hyderabad from the year 2009 and when notice was sent to the Amba Gardens address it has returned unserved with an endorsement of addressee left without instructions. It is submitted that, when the notice was not served under Rule 3 (g) of the Personal Guarantors Rules, 2019, the notice was required to be affixed at the premises of the Appellant, which had not been done, there is non-compliance of Rule 3. He further submitted that, as far as the notice sent to the Masab Tank address of Hyderabad, the notice is claimed to be received by one Mr. Mallesh, who is unconnected with the Appellant, notice shall not be deemed to have been served on the Appel....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....mere dispatch of the notice shall fulfil the condition in clause 20 and the guarantor cannot escape from his liability when the notice has been dispatched. Thus, when the deeming clause is mentioned in clause 20, the notice has to be treated to be served on the Appellant. The submission of the Appellant that there is violation of Rule 3 of the Personal Guarantors Rules, 2019 also does not commend us and the Rule 3 has to be read in conjunction with clause 20 of the Guaranty Deed and both has to be read in a manner as to give effect to the requirement of the rule as well as the Guarantee Deed. Present is the case where notice is deemed to be served at Masab Tank address, we are of the view that, no violation of Rule 3 can be found as alleged by the Appellant. 14. Now coming to the third submission that RP has sent the notice on 04.04.2024, which was deemed to be served on 06.04.2024 and RP has filed only the tracking report of the postal department which does not indicate as to which address the notice was sent. The copy of the RP's letter dated 04.04.2024 has been brought by the Appellant in page 152 of the appeal paper book, which reads as follows: - "Dear Sir, ....