in

AnApplication under Section 95(1) of theInsolvency andBankruptcy Code,2016read with

Rule7(2) of theInsolvency andBankruptcy (Application toAdjudicating Authorityfor

Insolvency ResolutionProcess for Personal GuarantorstoCorporateDebtors)Rules, 2019

In thematter of:

Indian Bank

…FINANCIAL CREDITOR

Versus

Mr. Syed FarooqueHussain

…RESPONDENT/PERSONALGUARANTOR

Dateofpronouncement: 19.12.2024

CORAM:

Smt. BidishaBanerjee, Member (Judicial)

ShriBalrajJoshi,Member (Technical)

Appearance(via videoconferencing/physically)

Forthe Financial Creditor

Mr. Santosh Kr. Roy, Adv.

Mr. R.Sanyal, Adv.

Ms.Zeba Khan, Adv.

Ms.Muskan Saha, Adv.

Forthe Personal Guarantor

Mr. SouravKumar

OR DE R

Per:Balraj Joshi, Member (Technical)

1. TheCourt Convened in a hybrid mode.

in

2. This C.P. (IB)/103 (KB)2024 has been preferred by the Financial Creditor to seek initiation of Insolvency Regulation Process against the Respondent Personal Guarantor to Corporate Debtor Rule, 2019 (“Personal Guarantors Rules”) and Regulation 4(2) of IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 (‘Personal Guarantors Regulations’) in terms of Section 99 (1) of the Insolvency and Bankruptcy Code, 2016 read with applicable Regulation of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors), 2016.

3. The amount in default is Rs.108,97,88.209.56p ( Rupees One Hundred Eight Crores Ninety Seven Lakhs Eighty Eight Thousand Two Hundred Nine and Fifty Six Paisa only).

4. The application is complete as required under Section 95 read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency ResolutionProcess forPersonal Guarantors toCorporate Debtor)Rules,2019.

5. Hon’ble Supreme Court in the judgment of Dilip B. Jiwrajka vs. Union of India &

Ors. In WP (Civil) No. 1281 of 2021 dated 09.11.2023 has upheld the Constitutional Validity of the Sections 94 to 100 and the propositions that can be culled out from theJudgments inter-alia are as follows:

“i. No judicial adjudication is involved at the stages envisaged in Sections 95toSection 99of theIBC;

ii. The Resolution Professional appointed under Section 97 serves afacilitative roleof collatingall thefacts relevant to iii. the examination of the application for the commencement of the insolvency resolution process which has been preferred under Section 94 or Section 95. The report to be submitted to the adjudicatory authority is recommendatory in nature on whether toaccept or reject theapplication;

in iv. No adjudicatory function of Adjudicating Authority is contemplated at the admission stage. To read in such a requirement at that stagewouldbe to rewrite the statuewhich isimpermissibleintheexercise of judicialreview;

v. The resolution professional may exercise the powers vested under Section 99(4) of the IBC for the purpose of examining the application for insolvency resolution and CP/IB/337/AHM/2020 12 of 17 to seek information on matters relevant to the application in order to facilitate the submission of the report recommending the acceptance or rejection of theapplication;

vi. There is no violation of natural justice under Section 95 to Section 100 of the IBC as the debtor is not deprived of an opportunity to participate in the process of the examination of theapplicationbythe resolutionprofessional;

vii. No judicial determination takes place until the adjudicating authority decides under Section 100 whether to accept or reject the application. The report of the resolution professional is only recommendatory in nature and hence does not bind the adjudicatory authority when it exercises its jurisdictionunder Section 100;

viii. The adjudicatory authority must observe the principles of natural justice when it exercises jurisdiction under Section 100 to determine whether to accept or reject the application;

CP/IB/337/AHM/202013of 17 ix. Thepurposeof theinterimmoratoriumunder Section 96is to protect thedebtor fromfurth