TaxTMI 
TaxTMI 
2026 (8) TMI 653
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....cts necessary for the disposal of this appeal are that a petition under Section 94 of the Code read with Rule 6 (1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for IRP for Personal Guarantor to Corporate Debtor) Rules 2019 (Personal Guarantors) Rules 2019, (PG to CD Rules) was filed by the Appellant for initiation of the Insolvency process against himself with the contention that on receipt of loan application from the Principal Borrower (Shubham Ginning Pressing Pvt. Ltd.), the Dena Bank (now Bank of Baroda) sanctioned various credit facilities to the CD and sanction letter for Rs. 15 Crore was issued by the Bank on 26.10.2013. 3. It is further reflected that another sanction letter was issued on 06.01.2015 by the Respondent Axis Bank in favour of the Principal Debtor and thus the total dues in favour of the Respondent No. 1 and Respondent No. 2 is stated to have become Rs. 205,798,655.77/- and Rs. 4,517,882.90/-. The date of default has been mentioned in the application as 29.07.2016 with regard to the Bank of Baroda, however no date of default has been mentioned with regard to the dues pertaining to the Respondent No. 2/ Axis Bank. 4. It is furt....
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....C 407 and Independent Sugar Corporation Ltd. vs. Girish Sriram Juneja (2025) 5 SCC 209 in order to interpret the Code including the applicability of the Limitation Act, 1963 and thus the Insolvency Law Committee Report of 2018 is required to be considered while deciding the applicability of Limitation Act, 1963 to Section 94 of the Code and it would be evident that the Limitation Act, 1963 would not be applicable to the debtors who have filed the proceedings under Section 10 or 94 of the Code. 12. It is further submitted that Section 10 is pari materia to Section 94 of the Code and this Tribunal in BK Educational Services Pvt. Ltd. (supra) while holding that Limitation Act, 1963 will not be applicable to Section 7 and 9 of the Code also held that the Limitation Act would also not be applicable to Section 10 proceedings, since the same is filed by the debtor himself and not by the creditor. The Hon'ble Supreme Court in the judgment delivered on appeal in i.e. BK Educational Services Pvt. Ltd. (2019) 11 SCC 633 (supra) while setting aside the judgment of this Appellate Tribunal only opined about the applicability of the Limitation Act to Section 7 and 9 of the Code and did not dis....
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....the Adjudicating Authority to appoint Resolution Professional before adjudicating the application moved either under Section 94 or 95 of the Code while no such exercise has been taken by the Tribunal in this case. 18. While referring to the law laid down by this Appellate Tribunal in CL Sharma vs. Bank of Maharashtra, CA (AT) (Ins) No. 316 of 2024 dated 27.02.2024 it is submitted that even the issue of limitation cannot be adjudicated without appointing the RP under Section 97 of the Code. 19. It is submitted that the impugned judgment passed by the Tribunal could not stand with the legal scrutiny and therefore is liable to be set aside. 20. Ld. Counsel appearing for the Respondent No. 1 i.e. Bank of Baroda submits that the application under Section 94 of the Code was filed by the Appellant for the sole purpose of obstructing the SARFAESI recovery efforts of the bank, which have concluded and the same has rightly been dismissed. 21. It is further submitted that the guarantee of the appellant was invoked on 19.09.2016 and since then the Bank has gone from pillar to post to recover its amount but the efforts of the bank were obstructed by the appellant at every stage by f....
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....Kumar Chugh vs. Assets Care and Construction Enterprises, (2024) SCC Online 1164. 28. It is also submitted that the application moved by the appellant is barred by limitation as the guarantee was invoked on 19.09.2016 while the application has been filed in January, 2025 and thus there was no requirement to appointment of the RP as the application is ex facie time barred. 29. It is further submitted that the application has been filed with an ulterior motive and for misusing the process of law and the appellant may not get any help from law laid down in CL Sharma (supra) where in the guarantee was invoked on 26.07.2022 while in the instant case the guarantee was invoked on 19.09.2016. 30. It is further submitted that the appellant could also not get any benefit from the law laid in Worldviews Tour Pvt. Ltd. (supra) which is pertaining to Section 10 of the Code and in the reasoning of the said judgment the emphasis has been given on the right of the company which may be defeated if the application is held time barred, while in the instant appeal the application has been moved by the individual guarantor under Section 94 of the Code. 31. It is further submitted that there....
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....f Section 10 of the Code and the law laid down by the Hon'ble Supreme Court in B.K. Educational Services Pvt. Ltd. (supra) is not applicable to either Section 10 or Section 95 proceedings and the observations of this Appellate Tribunal in Suyog Jain (supra) is not applicable to the proceedings under Section 94 of the Code and is not a binding precedent as it never dealt with the issue of applicability of the Limitation Act and moreover the Suyog Jain judgment has been challenged and is pending before the Hon'ble Supreme Court for adjudication and relying on various cases decided by various Benches of the NCLT it is projected that the Provisions of Limitation Act would not be applicable to the proceedings of Section 10 and 94 of the Code. 35. The other submission of the Ld. Counsel for the Appellant is with regard to the fact that without appointment of any RP under Section 97 and without considering the report which may be filed by the RP under Section 99 the petition has been dismissed in violation of the law laid down by the Hon'ble Supreme Court in Dilip B. Jiwrajka (supra). 36. The Respondent Bank however maintained that the account of Principle Borrower was declared NPA ....
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....o contend that once an application under Section 94 is filed, the Adjudicating Authority is required to appoint a Resolution Professional before examining the application on merits. It is, therefore, necessary to consider whether the said judgment has any application to the facts of the present case. 40. It is relevant to note that the proceedings before the Hon'ble Supreme Court in Dilip Jiwrajka arose out of an application filed by a creditor under Section 95 of the Insolvency and Bankruptcy Code, 2016. The Hon'ble Supreme Court was considering the constitutional validity of the provisions relating to insolvency proceedings against personal guarantors and the procedure prescribed under Sections 95 to 100 of the Code. The observations made regarding the appointment of the Resolution Professional and submission of the report under Section 99 were, therefore, made in the context of proceedings initiated by a creditor under Section 95. 41. The present case arises from an application filed by the debtor herself under Section 94 of the Code. The issue before us does not relate to the constitutional validity of the provisions of section 95-100 of the Code or with the proce....
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....lable defences before the Debt Recovery Tribunal or any other forum in accordance with law. The decision of this Appellate Tribunal has not been challenged in Hon'ble Supreme Court and has therefore attained finality. 45. The above decision shows that appointment of a Resolution Professional is not an essential requirement in every case under section 94. The Adjudicating Authority, where it finds, on the admitted facts and the applicable law, that the application is not maintainable, it can reject an application under Section 94 before appointing the RP. The order cannot be said to be invalid merely because a Resolution Professional was not appointed. The validity of such an order has to be examined in the facts of each case. 46. We also find it necessary to examine the conduct of the Appellant in the light of the sequence of events preceding the filing of the present application. The personal guarantee was invoked on 19.09.2016, following which recovery proceedings under the SARFAESI Act and before the Debt Recovery Tribunal continued for several years. The Appellant had earlier filed an application under Section 94, which came to be dismissed on 20.11.2023, with liberty to ....
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....ould not get any relief from the DRT who refuse to grant relief by order dated 09.08.2024, applications have been filed under Section 94 giving rise to this appeal. In the facts of the case as noticed above, we are of the view that initiation of proceeding under Section 94 by the personal guarantor was not with object of resolution of insolvency of the personal guarantor rather it was only with the intent to somehow create hurdles in the conclusion of the proceedings initiated by the Bank for recovery of its debts when auction was already held Comp. App. (AT) (Ins.) Nos. 741 & 742 of 2026 17 of 18 on 11.04.2024 which was confirmed on 12.04.2024, filing of the application on 27.04.2024 clearly was not bona fide application and the application was an abuse of process of Court and we are not inclined to interfere with the impugned order passed by the adjudicating authority rejecting the application filed by the appellant in facts of the present case. 15. Learned counsel for the appellant as well as learned counsel for the respondent have made submissions relying on various judgments of the Hon'ble Supreme Court and this Tribunal, according to the appellant unless the Sale Cer....