The failure of a Personal Guarantor to submit a repayment plan during the Insolvency Resolution Process justifies the initiation of Bankruptcy Proceedings under the Insolvency and Bankruptcy Code.

ORDER

1. The present application was filed by the Applicant/Financial Creditor under Section 121 read with Section 60(2) of ‘Insolvency and Bankruptcy Code, 2016’ (hereinafter referred as ‘IBC’) r/w Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules, 2019 against Mr. Anurag Gupta, the Personal Guarantor of ‘M/s. MBS Impex Pvt Ltd.’ (hereinafter referred as Corporate Debtor) inter alia, seeking initiation of Bankruptcy Proceedings.

2. BRIEF OF AVERMENTS OF THE APPLICATION

2.1It is submitted that the Corporate Debtor availed working capital facilities in the form of overdraft and SBLC/BG under different loan documents from ICICI Bank. It is submitted that to secure the repayment of the credit facilities, inter alia the Respondent stood as a Guarantor and executed Guarantee Agreement dated 09.02.2011. Subsequently, the Corporate Debtor committed default in repaying the credit facilities availed. In view of the same, ICICI Bank issued notices to the Corporate Debtor and the Respondent recalling the outstanding amounts.

2.2 On the failure of the Corporate Debtor and also the Respondent (including other Guarantors) in repaying the availed credit facilities, ICICI Bank approached Ld. Debt Recovery Tribunal (DRT), Hyderabad vide O.A. No. 397 of 2015. After perusing the records, the Ld. DRT passed a decree and issued recovery certificate directing the Corporate Debtor and the Personal Guarantors including the Respondent herein to pay the amounts within 30 days, but the same was not complied by the Respondent and the Corporate Debtor.

2.3 It was submitted that pursuant to the Central Government framing of I&B (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantor to Corporate Debtor) Rules, 2019 ICICI Bank issued a demand notice dated 17.12.2021 asking the Respondent to pay the outstanding amounts. As the Respondent failed to comply with the said demand notice, ICICI Bank filed Company Petition vide C.P. (IB) No. 141/95/HDB/2022 before this Adjudicating Authority seeking initiation of ‘Insolvency Resolution Proceedings’ (hereinafter referred as ‘IRP’) against the Respondent.

2.4 By an order dated 29.04.2022, this Adjudicating Authority granted interim- moratorium and appointed Mr. Kambhammettu Vamshi as the Resolution Professional with a direction to file his report within 10 days from the date of appointment as provided under Section 99 of IBC. The Resolution Professional filed the report on 24.05.2022 with a recommendation to admit the Company Petition and initiate IRP against the Respondent. On the other hand, ICICI Bank assigned the credit facilities of M/s. MBS Impex Pvt. Ltd. to the Applicant herein by way of an Assignment Agreement dated 26.08.2022. Subsequent thereto, the Applicant herein pursued the IRP proceedings against the Respondent.

2.5 After hearing both the sides, this Adjudicating Authority by an order dated 03.05.2023 admitted the Company Petition under Section 100 of IBC and initiated IRP against Respondent by appointing Mr. Vamshi Kambhammettu as the Resolution Professional. As part of the duties, the Resolution Professional filed a Progress Report vide I.A. No. (IBC) 1170 of 2023 under Section 118 of IBC stating that there was no repayment plan received from the Respondent No.1 despite giving sufficient opportunity. This Adjudicating Authority by an order dated 29.09.2023, took the said report on record and allowed the application. Subsequently, the Resolution Professional filed an application vide