J U D G M E N T

1. The petitioner has filed the instant writ petition seeking quashing of the impugned Demand Notice dated 09.12.2022 issued by the respondent i.e., Rural Electrification Corporation Limited(hereinafter „REC Ltd.‟) under Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 (hereinafter ‘Rules, 2019’) invoking the personal guarantees of the petitioner for the purported total outstanding debt of Rs. 1211,91,94,259 (hereinafter „impugned demand notice‟).

2. As per the facts of the case, the petitioner stood as a personal guarantor for a loan obtained by one FACOR Power Ltd. (hereinafter „FPL‟) for a sum of Rs.517.90 crores from the respondent i.e, REC Ltd. The loan agreement was dated 22.05.2009 (amended on 29.10.2010, 28.06.2013 and 12.11.2014). The deed of personal guarantee was executed on 24.08.2009 (amended and restated on

29.10.2010, 21.06.2013 and 22.01.2015).

3. The aforesaid loan, other than being secured by the petitioner in the capacity of a personal guarantor, was also inter alia secured by a corporate guarantee on behalf of one Ferro Alloys Corporation Ltd.

(hereinafter „FACOR‟).

4. The respondent is a Maharatna Company under the Ministry of Power and is a „State‟ within the definition of Article 12 of the Constitution of India.

5. On account of the default being committed by FPL in repaying the loan, the respondent in May, 2017 initiated Corporate Insolvency Resolution Process (hereinafter „CIRP‟) in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 (hereinafter ‘IBC’), against FACOR, which culminated in a Resolution Plan being submitted by one Sterlite Power Transmission Limited (hereinafter ‘SPTL’) dated 13.11.2019.

6. Thereafter, the said Resolution Plan was also approved by National Company Law Tribunal (NCLT), Cuttack on 30.01.2020. The operative part of the order dated 30.01.2020 passed by the NCLT, Cuttack reads as under:-

―19. The Resolution Plan submitted by M/s Sterlite Power Transmission Limited (S.PTL) i.e. Resolution Applicant, approved by 95.15 % of voting share in 31st Committee of Creditors Meeting dated 13.11.2019 is APPROVED, as per Section 31 (1) of the Insolvency and Bankruptcy Code, 2016. Accordingly, the same shall be binding on the Corporate Debtor and its employees, members, all creditors including Central and State Government and local authorities, guarantors and other stakeholders.‖

7. The order passed by the NCLT, Cuttack on 30.01.2020 approving the Resolution Plan was carried in an appeal before the National Company Law Appellate Tribunal (NCLAT) by the promoters of FPL.

8. Vide final judgment dated 25.11.2020, the NCLAT dismissed the appeal against the NCLT order dated 30.01.2020. Paragraph nos. 51-55 of the said judgment dated 25.11.2020 are reproduced as under:-

―51. Based on the above discussion, it is clear that the Appellant abstained from voting but participated in the Resolution Process. The Appellant was fully aware of the developments from Resolution Process from up to the approval of the Resolution Plan before the Adjudicating Authority but never raised any objection. The Appellant has directly filed the Appeal before this Appellate Tribunal after withholding of material information from this Tribunal. Therefore, the Appellant of Appeal No. 462 of 2020 is not entitled for any relief in view of the Law laid down by the Hon'ble Supreme Court in(1994) 1 S.C.C. Page 1, wherein it is observed that;

"One who comes to the Court, must come with clean hands. We are constrained to say that more often than not, process of the Court is being abused. Property-

grabbers, tax-evaders, bank-loan dodgers and other unscrupulous persons from all walks of life find the Court process a convenient liver to retained the illegal gains indefinitely. We have no hesitation to say that a person, who's Case is based on falsehood, has no right to approach the