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SANJEEV NARULA
Sanjay Sarin – Appellant
Versus
Authorised Officer, Canara Bank – Respondent
JUDGMENT
Sanjeev Narula, J. The Petitioner, who stood as a guarantor to a loan facility, is aggrieved with the recovery action initiated by the bank, against the borrower and himself, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. According to him, once a resolution plan qua the borrower was approved under Section 31 of the under the Insolvency and Bankruptcy Code, 2016, the bank's claims stood addressed. Thus, it could not have sought recovery for amounts over and above the amount approved by the NCLT, and seeks a mandamus to that effect. Is the petition maintainable for the above reliefs, is the short question before this court.
2. Briefly stated, Mr. Sanjay Sarin [`Petitioner'], stood as a guarantor to a loan of Rs.34 crores advanced by Canara Bank (formerly known as Syndicate Bank) [`Respondent No. 1'] to the borrower - Alphabet Heights Pvt. Ltd. (formerly known as Maple Realcon Private Ltd.) [`Respondent No. 3']. Subsequently, corporate insolvency resolution proceedings [`CIRP'] under the Insolvency and Bankruptcy Code, 2016 [`IBC'] were initiated against Respondent No. 3 (which became the corporate debtor) in 20
The court established that recovery proceedings under the SARFAESI Act can be initiated against personal guarantors even when insolvency proceedings are ongoing against the principal borrower.
A Personal Guarantor's application under Section 94 of the IBC is maintainable even when SARFAESI recovery proceedings are pending, provided the initiation is not a sham proceeding meant solely to ob....
Section 94 IBC petition by personal guarantor admissible on proof of debt and default alone; no assessment of repayment capacity or assets required at admission stage; IRP role facilitative, not inve....
Approved resolution plan extinguishes all encumbrances, attachments on guarantors' assets (charged or not), binding dissenting creditors post full payment and finality; state law recoveries for settl....
For Section 94 petitions by personal guarantors, admission requires only proof of default; no assessment of repayment capacity or assets needed at threshold stage; RP role facilitative, not investiga....
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