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IN THE HIGH COURT OF DELHI AT NEW DELHI

BEFORE

HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

+

W.P.(C) 3293/2023 & CM APPL 12815/2023

Between: -

VINEET SARAF

H-21, MAHARANI BAGH

NEW DELHI- 110065

.....PETITIONER

Advocates.)

AND

RURAL ELECTRIFICATION CORPORATION LTD.

THROUGH ITS HEAD OF DEPARTMENT (FINANCE-RECOVERY)

HAVING ITS REGISTERED OFFICE AT:

CORE- 4, SCOPE COMPLEX,

7, LODHI ROAD, GCO COMPLEX,

PRAGATI VIHAR, NEW DELHI-110003

ALSO THROUGH ITS NOMINATED COUNSEL:

MS. RAAVI BIRBAL

313, LAWYERS CHAMBERS

DELHI HIGH COURT, NEW DELHI

.....RESPONDENT

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Pronounced on: 21.07.2023

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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

Digitally Signed

By:PURUSHAINDRA

KUMAR KAURAV

Signature Not Verified

Digitally Signed

By:PRIYA

Signing Date:21.07.2023

16:52:47

Signature Not Verified

- 2 -

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

Digitally Signed

By:PURUSHAINDRA

KUMAR KAURAV

Signature Not Verified

Digitally Signed

By:PRIYA

Signing Date:21.07.2023

16:52:47

Signature Not Verified

- 3 -

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:-

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:-

"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-

Digitally Signed

By:PURUSHAINDRA

KUMAR KAURAV

Signature Not Verified

Digitally Signed

By:PRIYA

Signing Date:21.07.2023

16:52:47

Signature Not Verified

- 4 -

grabbers, tax-evaders, bank-loa