The Insolvency Resolution Process for Personal Guarantors can be initiated under Section 95 IBC, 2016, maintaining these guarantors' obligations even during corporate insolvency proceedings.

ORDER

[Per: Bench]

1. The present application CP(IB) No.06 of 2022 is an application filed on 30.08.2021 by the Applicant/Financial Creditor filed U/s 95 of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as IBC, 2016") read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, seeking commencement of Insolvency Resolution Process against one Mr. Jatin Rajnikant Mehta, Personal Guarantor of Corporate Debtor- Winsome Diamonds and Jewellery Limited – earlier known as the SU-RAJ Diamonds and Jewellery Limited for a default amount of Rs.457,31,77,839/-. The Respondent/Personal Guarantor stood as Guarantor in respect for repayment of debt, interest, cost, charges and other expenses in respect of Deed of Guarantee dated 10.11.2009, Supplemental Deed of Guarantee 15.12.2010, and 25.01.2012 in favour of Applicant. The date of default is stated to be 08.01.2017.

2. In so far as the Personal Guarantor to Corporate Debtor is concerned, the Hon‟ble Supreme Court of India in the matter of Lalit Kumar Jain vs. Union of India & Ors. in the Transferred Case (Civil) No.245/2020 has upheld the vires of the notification issued by the Central Government vide S.O. 4126(E) dated 15.11.2019, in so far as it relates to coming into force of Insolvency and Bankruptcy Process of Personal Guarantors to Corporate Debtor. Thus, when a Corporate Insolvency Resolution Process in relation to Corporate Debtor is pending before this Adjudicating Authority, then as per Section 60 (2) of IBC, 2016 the NCLT would be competent forum to file an Application for Personal Guarantor in relation to such Corporate Debtor.

3. It is stated that Corporate Debtor- Winsome Diamonds and Jewellery Limited – earlier known as the SU-RAJ Diamonds and Jewellery Limited. being principal borrower applied for a various loan/Credit Facilities to the Applicant Bank which were approved vide letter dated 05.09.2009 and said Credit Facilities were renewed from time to time vide Sanction Letter dated 06.11.2010 and Sanction Letter dated 13.02.2013. The Respondent was Director and personal Guarantor of the Corporate Debtor who executed and signed various loan/security documents in favour of Applicant Bank. The Respondent executed Deed of Guarantee dated 10.11.2009, Supplemental Deed of Guarantee 15.12.2010, and 25.01.2012 in favour of the Applicant/Financial Creditor.

4. However, after availing the Loan/Credit Facilities, the Corporate Debtor failed to maintain financial discipline as per terms and conditions of the loan agreement due to which loan account became irregular. Consequently, the said loan account of the Corporate Debtor was classified as NPA on 06.07.2013 and recalled by Applicant Bank.

5. Thereafter, on 02.06.2014 O.A. No. 304 of 2014 was filed before Debt recovery Tribunal, Ahmedabad in which Recovery Certificate of Rs.4687,04,04,315.29 was issued against the Corporate debtors as well as against the Respondent and others.

6. Thereafter, one Operational Creditor M/s Ramesh t. Mehta (HUF) filed petition under section 9 of IBC, 2016 bearing CP(IB) No. 208 of 2017 against the Corporate Debtor for defaulting in paying the financial debt of Rs.17,50,152/-. The said petition was admitted vide order dated 13.02.2018 and Corporate Insolvency Resolution Process was initiated against the Corporate Debtor. Further, vide order dated 01.09.2020 liquation order passed against the Corporate Debtor.

7. Due to non-payment of the amount by the Corporate Debtor, in compliance with Rule 7(1) of the Insolvency and Bankruptcy (Application to