Bhavna Ravi Matta

Mr. Nikhil Rajani, Ld. Counsel for the Financial Creditor/ Intervenor present. Mr. Manoj Kumar Mishra, Ld. Counsel for the Personal Guarantor present.

Ld. Counsel for the Financial Creditor intervene in the matter and submits that the present Application is filed to thwart their action under SARFAESI Act.

On reading of section 97 of the Code, this Bench feels that it mandates the appointment of the Resolution Professional once an Application section 94 and 95 is filed complete all respect. The Bench considers it appropriate to direct the RP to examine the contentions of Financial Creditor in his report for further consideration of this Bench.

This is a Company Petition filed by Mrs. Bhavna Ravi Matta (“the Applicant / Personal Guarantor”), being the Personal Guarantor to the Corporate Debtor, under Section 94(1) of the Insolvency & Bankruptcy Code, 2016 (IBC) read with Rule 6(1) of the Insolvency and Bankruptcy (Application for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 seeking to initiate Bankruptcy Process against himself.

The Applicant had executed guarantee agreements to secure the loans obtained by the Asrec (India) Limited (the Financial Creditor) with respect to M/s North American Mercantile India Pvt. Ltd. (the Corporate Debtor) from Abhyudaya Co-operative Bank Ltd. Financial debt was incurred on 07.08.2018 with the sanction of loan of Rs.9,50,00,000/- @11.50% p.a. from Abhyudaya Co-operative Bank Ltd. wherein the Applicant had given his Personal Guarantee as a Surety in Clause E of the Sanction Letter. Abhyudaya Co-operative Bank Ltd. further modified the credit facilities granted to Rs.9,50,00,000/- @13% p.a. vide sanction Letter dated 30.11.2019 where the Applicant had given his Personal Guarantee as a Surety in Clause 3 of the Sanction letter. The account of the Applicant was declared as Non-performing Assets (NPA) on 09.12.2019 with a total outstanding amount of Rs.9,55,69,330.25/- which was conveyed vide a Demand Notice under Section 13(2) dated 25.02.2020, thus, invoking the personal guarantee of the Applicant. That the loan was transferred to Asrec (India) Limited. On 24.02.2021 Asrec (India) Limited, now the Financial Creditor issued a possession notice to the Applicant under Section 13(4) of the SARFAESI Act, 2002.

That subsequently, the Court of the Addl. Chief Metropolitan Magistrate, 3^rd Court, Esplanade, Mumbai vide its order dated 26.07.2022 has directed for taking possession of the secured assets of the Applicant. Thus, Mrs. Bhavna Ravi Matta being the Personal Guarantor of the Corporate Debtor is sincerely willing to undergo Personal insolvency to seek an opportunity to offer a repayment plan to the Financial Creditor subject to its approval to get away from all the issues of liability cum personal guarantee.

Affidavit in reply dated 12.04.2023 has been filed on behalf of ASREC (India) Limited praying that RP may not be appointed in this matter as it will prejudice its action under SARFAESI Act where chances of recovery higher than the resolution exist.

The Applicant has served a copy of this Petition upon the RP of the Corporate Debtor as well as Abhyudaya Co-operative Bank Ltd., the Financial Creditor for whom she is a Personal Guarantor, in terms of Rule 6(2) of Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019.

The Petition for initiating Insolvency Resolution Process against Personal Guarantor of the Corporate Debtor is complete in all respect. Therefore, this Bench is of the opinion that Resolution Professional is to be appointed in this case and accordingly;

This Bench appoints Mr. Dinesh Ruparel, Insolvency Resolution Professional having Registration IBBI/IPA-001/IP-P-02477/2021-2022/13998; as the Resolution Professional (RP) in the matter. The fee payable to Resolution Professional (RP) shall be in accordance with the Insolvency and Bankruptcy Board of India (IBBI) Regulations/Circulars/ Directions issued in this regard.

The Resolution Professional shall examine the Application within 10 days from the date of his appointment and submit its report to the Adjudicating Authority recommending for approval or rejection of the Application as referred under section 99(1) of the Code.

This Bench also directs for an advance payment of Rs.2,00,000/-(Rupees two lakh only) to be paid by the Financial Creditor to the Resolution Professional (RP) immediately to initiate the process which shall be adjusted towards the fee and expenses payable to the Resolution Professional (RP).

The interim-moratorium under Section 96(1)(a) of the Insolvency and Bankruptcy Code, 2016 has commenced on the date of filing of this application by the Financial Creditor and will cease to have effect on the date of admission.

During such interim-moratorium period -

a. any legal action or proceeding pending in respect of any debt shall be deemed to have been stayed; and

b. the creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt.

Post this matter on 12.06.2023.