An effective demand notice is essential for invoking a personal guarantee before initiating insolvency proceedings; failure to do so renders the petition unmaintainable.

JUDGMENT

I.A. No. 2026 of 2024, I.A. No. 2027 of 2024 and C.P.(IB) No.178/Chd/Hry/2021 are taken up together for discussion and adjudication, being inter-related and interconnected.

C.P.(IB) No.178/Chd/Hry/2021:

The present petition has been filed by Siemens Financial Services Private Limited, (hereinafter referred to as the “Petitioner” or “SFSPL”), under Section 95 of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as the “Code” or “IBC”) to initiate Personal Insolvency Resolution Process (hereinafter referred to as the “PIRP”) against Ravi Kumar Jain, (hereinafter referred to as the “Personal Guarantor”).

2. The registered office/address of the Corporate Debtor and the Personal Guarantor is situated in the State of Haryana, falling under the jurisdiction of this Adjudicating Authority.

3. The present application was filed on 24.03.2021 before this Adjudicating Authority on the ground that the Guarantor has defaulted to make a payment of a sum of Rs. Rs.8,94,58,478/-.

4. The details of transactions leading to the filing of this petition as averred by the Petitioner are as follows:

i. The Corporate Debtor, where the Personal Guarantor was a director, approached SFSPL for a lease facility of equipment and entered into a Master Lease Agreement on 21.05.2019. Various documents were executed, including a Lease Rental dated 28.05.2019, a Term Sheet dated 27.05.2019, and a Form of Guarantee dated 28.05.2019. An Irrevocable and Unconditional Demand Promissory Note was also issued by the Guarantor to SFSPL on 28.05.2019.

ii. RCC Infraventures Ltd. (hereinafter referred to as the “Corporate Debtor”) committed a default in repaying the lease rentals.

iii. Details of the machines/assets over which SFSPL is having its sole and exclusive ownership and its total cost are clearly stated in the Surrender Letter dated 24.12.2019 issued by the Corporate Debtor in favour of SFSPL.

iv. Thereafter, SFSPL issued a Legal Notice dated 07.12.2020 for termination of the lease facility and invocation of Arbitration under the Master Lease Agreement dated 28.05.2019 and Demand Notice dated 11.12.2020 under rule 7(1) of Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtors) Rules, 2019.

v. The Guarantor is liable for an amount of Rs.9,97,31,150/- as on date 20.10.2020.

vi. Reliance is placed upon the judgment of Hon’ble NCLAT in the matter of “State Bank of India vs. Mahendra Kumar Jajodia Personal Guarantor to Corporate Debtor” and “INTEC Capital Limited vs. Eastern Embroidery Collection” to assert the maintainability of the Section 95 petition without proceeding qua the Corporate Debtor.

vii. RP was appointed vide order dated 03.01.2024 with directions to submit his report under Section 99 of IBC within ten days.

5. RP’s Report: Gulshan Kumar Gupta (RP) filed his report through I.A. No.410/2024, wherein the observation recorded by RP are as under:

7. That the Resolution Professional has examined the application as required under sub-section ( 1) of section 99 of I&B Code and on the basis on such examination it is most respectfully submitted:

a. As per information available at the website of the Ministry of Corporate Affairs, the registered office of the Corporate Debtor is situated at 14, Ground Floor, Vipul Agora M.G. Road, Sector 28, Gurgaon, Haryana. Accordingly, this Hon'ble AA has the territorial jurisdiction over the place where the registered office of the corporate person is located [provisions of section 60 complied with].

b. The amount of default as mentioned in the petition is Rs. 8,94,58,478 (Rupees eight crore ninety-four lakh fifty-eight thousand four hundred seventy-eight only) and same is above the threshold limit of rupees one thousand rupees [provisions of section 78 complied with].

c. A demand notice was issued on 14.12.2020 in the prescribed form [provisions of rule 7 (1) complied with].

d. The debtor failed to make repayment of the debt in defau