Insolvency proceedings can be initiated against personal guarantors under the IBC, even if they are non-residents, provided there is a valid recovery certificate and the claim is within the limitation period.

COMMON ORDER

(Hearing through hybrid mode

1. This Petition CP(IBC)/217(CHE)/2021 has been filed u/s. 95 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016") r/w. Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 by Central bank of India (“Financial Creditor”) for initiating insolvency resolution process against Mr. Dominic Savio (“Personal Guarantor”) of the Corporate Debtor Oceanic Edibles International Limited. The amount in default is Rs.160,87,73,025/- (Rupees One Hundred Sixty Crores, Eighty Seven Lakhs Seventy Three Thousand and Twenty Five Only) as on 15.02.2021. The Date of Default, as specified in Part-III of the Petition is 27.06.2019.

This petition has been filed on 28.02.2021.

2. Part – I of the petition sets out the details of the Petitioner / Financial Creditor. It has its registered office at Stressed Assets Management Branch, 48/49, Montieth Road, Egmore, Chennai – 600 008. Part – II of the petition sets out the details of the Respondent / Personal Guarantor. The address of the Respondent is No.6, 1st Floor, Wellington Estate, No.53, Ethiraj Salai, Egmore, Chennai – 600 008. The Respondent stood as the personal guarantor in respect of the loans availed by Oceanic Edibles International Limited, the Corporate Debtor.

3. In Part – III of the petition, the Petitioner has given the debt and default amount as Rs.160,87,73,025/- and the date of default as 27.06.2019.

4. FACTS

4.1. Brief facts of the case are that on the request of Oceanic Edibles International Ltd., the Corporate Debtor, and the personal guarantors, including the Guarantor Mr. A.Dominic Savio, the Petitioner along with Consortium Banks sanctioned the Working Capital facilities. The Corporate Debtor executed the loan documents. Mr. A.Dominic Savio executed the Deeds of Guarantee dated 23.07.2011 and 21.07.2014 guaranteeing the repayment of working capital facilities granted to the Corporate Debtor. The operation and conduct of the loan account became irregular and the loan account was declared NPA on 10.09.2013. The Petitioner filed O.A. No. 335 of 2015 for recovery of debt before the DRT, Chennai against the Corporate Debtor and the Guarantors. The DRT passed an order on 21.02.2019 in favour of the Bank. Debt Recovery Certificate was issued vide DRC No. 313/2019 dated 27.06.2019 for a sum of Rs.103,04,18,350.73 with interest @ 12% p.a. (simple).

4.2. It is stated that as per Section 19(22-A) and Section 19(22) of the RDB Act , Recovery Certificate issued by the Presiding Officer, shall be deemed to be a decree or order of the Court for the initiation of insolvency proceedings against the Individual Guarantor.

4.3. It is stated that the Recovery Officer issued demand notice dated 27.06.2019 to the Corporate Debtor and the Guarantors including Mr.A.Dominic Savio to make the payment. In meanwhile, ICICI Bank Ltd., filed Section 7 petition in CP/563(IB)/CB/2017 against the Corporate Debtor, Oceanic Edible International Ltd., for initiating Corporate Insolvency Resolution Process. The petition was admitted vide an order dated 13.09.2017. Thereafter, the Tribunal vide an order dated 10.12.2018 ordered for the liquidation of the Corporate Debtor, viz., Oceanic Edible International Ltd and appointed Mr. Pathukasahasram Raghunathan Raman, as the Liquidator.

4.4. It is stated that Insolvency and Bankruptcy Code, 2016 came into effect from 01.12.2016 and the provisions of the Part-III relating to insolvency of the personal guarantor to Corporate Debtor were brought into force from 01.12.2019. Pri