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2025 Supreme(Online)(NCLT) 482
NATIONAL COMPANY LAW TRIBUNAL
Sanjiv Jain, Venkataraman Subramanian, JJ
Mr Ganesh Kumar Patwari – Appellant
Versus
ICICI Bank Ltd – Respondent
C.P. (IB) - 105/2024
For the Petitioner:Sathish Kumar A S
The court affirmed that a Personal Guarantor's liability is co-extensive with that of the principal debtor, and procedural deficiencies in the application do not bar the initiation of insolvency resolution.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 94 - Application for initiating insolvency resolution process filed by Personal Guarantor for default amount of INR 9,18,10,306/- - Corporate Debtor defaulted on loans, classified as NPA - Demand notices issued under SARFAESI Act, 2002 - Application admitted for insolvency resolution process. (Paras 1, 22, 28)
(B) Personal Guarantor's liability - Under Section 128 of Indian Contract Act, 1872, surety is jointly and severally liable with principal debtor - Financial Creditor's objections regarding incomplete application and undervalued property addressed as procedural matters. (Paras 24, 26, 27)
Facts of the case:
The application was filed by the Personal Guarantor for initiating insolvency resolution process due to default by the Corporate Debtor, with a specified default amount and date. The Corporate Debtor had availed loans from the Financial Creditor, which became NPA. (Paras 1-5)
Findings of Court:
The Tribunal admitted the application for insolvency resolution process against the Personal Guarantor, directing the initiation of the process and the appointment of a Resolution Professional. (Paras 28)
Issues: The main issues included the validity of the application, the completeness of Form A, and the valuation of the mortgaged property. (Paras 26, 27)
Ratio Decidendi: The court held that the application met the requirements under Section 94 of IBC, 2016, and procedural deficiencies should not impede justice. (Paras 22, 26)
Result: Application admitted.
COMMON ORDER
(Hearing through hybrid mode
1. The present Application (CP(IB)/105/CHE/2024) has been filed u/s. 94 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016") r/w. Rule 6(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 by Ganesh Kumar Patwari (“Personal Guarantor”) for initiating insolvency resolution process in respect of default amount of INR 9,18,10,306/-(Rupees Nine Crores Eighteen Lakhs Ten Thousand three Hundred and Six Only) together with interest. The Date of Default, as specified in Part-III of the present Application is 21.02.2024.
This Application has been filed before this Tribunal on 21.02.2024.
2. Part – I of the application sets out the details of the Personal Guarantor. Address is mentioned as No1, Chittaranjan Road, Teynampet, Chennai, Tamil Nadu – 600 018. Part-III of the application sets out the details of Creditor, Corporate Debtor, debt amount and default amount. It is stated that, ICICI Bank Limited is the Creditor. The debt amount is stated as Rs.9,18,10,306/- (Rupees Nine Crores Eighteen Lakhs Ten thousand Three Hundred and Six only). Date of default is stated as 21.02.2024. It is stated that, the Applicant stood as the Personal Guarantor for the loans availed by Swiftmail communications Limited (Corporate Debtor).
3. It is stated that the Corporate Debtor had availed credit facilities from ICICI Bank Limited.
4. It is stated that the Applicant, Ganesh Kumar Patwari guaranteed the payment on demand of all moneys and discharge of all obligations and liabilities owing or incurred to the bank, the secured creditor by the borrower company.
5. It is stated that the Corporate Debtor defaulted in the payment and therefore the loan account of Corporate Debtor was classified as Non-performing Asset (NPA) as on 21.02.2024.
6. It is stated that the bank issued a demand notice to the corporate debtor as well as the guarantors on 03.04.2024 under Section 13(2) of the SARFAESI Act, 2002 directing to repay the dues to the tune of Rs.7,03,17,535.00 (Rupees Seven Crores Three Lakhs Seventeen Thousand Five Hundred Thirty Five Only)as on 03.04.2024. (Copy of Demand Notice dated 03.04.2024 is annexed and marked as Annexure 1(i)(b) along with the Application Typeset)
7. The demand notice dated 03.04.2024 sent by the Financial Creditor to the Corporate Debtor and the guarantors is extracted here below:
8. The applicant also furnished his Statement of Affairs as on 25.04.2024 (page No. 41 of the Application).
9. It is stated that the information as to the filing of the said application was intimated to the Financial Creditor by the Counsel of the applicant on the email of the financial creditor on 28.04.2024.
10. This Tribunal Vide Order dated 21.06.2024 in CP (IB) 105(CHE)/2024 appointed Ms. Satyadevi.A , as Insolvency Resolution Professional in this case and directed the Insolvency Resolution Professional to collate all the facts relevant to the examination of the application for the commencement of the Insolvency Resolution Process in respect of the personal guarantor.
Report filed by IRP in IA/1526/CHE/2024
11. In accordance with the Order of this Tribunal dated 21.06.2024, the appointed IRP has e-filed her report in IA/1526/CHE/2024 on 06.07.2024.
12. The IRP in her Report, after due examination of the application, documents filed along with the application, and the Reply filed by the Respondent, in addition to the requirements as mandated under clauses (1), (2), (3), (4), (5), (6), (7), (8), (9) and (10) of Section 99 of the IBC, 2016, has recommended for the admission of the present application by the Personal Guarantor u/s. 94 of IBC, 2016.
Submissions by the Respondent
13. It is stated that, the applicant in the present case is the Guarantor for the M/s. Swiftmail Communication Limited. It is stated that the Guarantor is a director in Swiftmail Communication Limited and is also
