Section 94 IBC petition by personal guarantor dismissed as time-barred and misuse to stall advanced SARFAESI auction after long delay post-possession, emphasizing strict limitation and protection of recovery sanctity.

COMMON ORDER

(Heard through Video Conferencing)

This petition CP(IB)151(CHE)2025 under Section 94(1) of Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 has been filed by Shoukath Sheriff (Personal Guarantor) who stood guarantee for the loan facilities availed by the Corporate Debtor, A & Z Lifestyle Retail Private Limited from Jammu & Kashmir Bank Limited. The prayer made in the petition is to initiate Insolvency Resolution Process. An application IA(IBC)/1034(CHE)/2025 under Section 99 of the Insolvency and Bankruptcy Code read with Rule 6 of the NCLT Rules, 2016 has been filed by Ms. B. Mekala, Interim Resolution Professional for taking on record the report recommending initiation of insolvency proceedings against the Petitioner/Personal Guarantor.

2. Part-I of the petition sets out the details of the Petitioner, Shoukath Sherif. He was born on 29.11.1965. He has been living at No.23/15, Fortune Villa, Tarapore Avenue, Harrington Road, 8^th Avenue, Chetpet, Chennai-600 031. His annual income is stated as Rs.31,51,610/-. He has given the details of his and his immediate family members assets at page 11 to 13 of the petition. He was Director in Sherif Global Services Pvt. Ltd & IKIGAI Enterprises Private Limited.

3. Part-III of the petition sets out the details of the Financial Creditor, Jammu and Kashmir Bank Limited. It has its office at No. 60, Rainbow Arcade, Pondy Bazaar, T. Nagar, Chennai-600 017 within the jurisdiction of this Tribunal. The amount of debt is stated to be Rs.1,31,27,407.45/-. The date of default is stated as 03.03.2020. Demand Notice under the SARFAESI Act, 2002 was issued by the bank on 03.01.2020.

4. As per the averments made, in 2016, the Corporate Debtor, A & Z Lifestyle Retail Private Limited had availed cash credit facilities to the tune of Rs.72,00,000/- and term loan for Rs.95,78,000/- from Jammu and Kashmir Bank Limited for its business purpose. To secure the credit facilities, the Petitioner and others had given their personal guarantees by executing the Guarantee Deeds. The loan of the Corporate Debtor was declared as NPA by the Bank/Financial Creditor. On 03.01.2020, the Financial Creditor issued a demand notice under Section 13(2) of the SARFAESI Act, 2002 claiming Rs.1,31,27,407.45, to the Corporate Debtor and the Guarantors after invoking the bank guarantees. It also initiated recovery proceedings and scrutinisation proceedings against the Corporate Debtor and the Guarantors.

5. It is stated that the statement of affairs shows that the Petitioner does not have sufficient means to clear the entire debt of the creditors with the available resources though he wishes to repay to the creditors and resolve the state of insolvency under the aegis of IBC. The available means would enable him to submit a reasonable repayment plan under Section 105 of IBC, 2016 with the support of the RP for resolving the stage of insolvency on account of accumulation of debt and non-payment. It is stated that this petition has been filed with an intent that the insolvency be resolved in a time-bound manner for value maximization, overall debts be resolved by not restricting to only one creditor and the past claims be settled. It is stated that the Petitioner is neither the undischarged bankr