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Judgment
Per: Ashok Kumar Borah, Member (Judicial)
Since common issues and laws are involved in these applications, they have been taken up together and a common order is passed in these cases.
These applications have been filed on 29.03.2022 by the Applicant /Financial Creditor M/s. Dhanlaxmi Bank Ltd(hereinafter referred to as ‘Financial Creditor’) under Section 95 (1) of the Insolvency and Bankruptcy Code, 2016 (I&B Code,2016) read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 (Personal Guarantors Insolvency Rules) against Dr. Ashalatha Nair, Dr. Bharath Chandran, and Mr. Sri. P.A Ahammed, Respondents/ Personal Guarantors of the Corporate Debtor M/s. Trivandrum International Health Services Ltd (hereinafter referred to as "Corporate Debtor'), for initiating Insolvency Resolution Process.
The brief facts leading to the present applications are as under:
I. The Applicant Bank has sanctioned Cash Credit Facility of Rs.1 Crore and Term Loan Facility of Rs. 15 Crore to the Corporate Debtor M/s. Trivandrum International Health Services Ltd vide sanction letter dated 30.03.2015 and the Corporate Debtor has executed Master Credit Agreement, Term Loan Agreement, and other loan documents for availing the credit facilities. As security towards the grant of credit facilities, the directors of the Corporate Debtor namely, Dr.Ashalatha Nair, Dr. Bharath Chandran C and Shri. P A. Ahamed have also executed personal guarantees. In addition to that M/s. Trivandrum Medical Specialty Services Ltd and Dr. K N Pai Heart Foundation, have also executed Guarantee in favour of the Applicant.
II. Due to failure in the repayment, the accounts of the Corporate Debtor became NPA on 30.05.2016. Hence, the Applicant issued a demand notice on 29.06.2016 and also issued notice under Section 13(2) of the SARFAESI Act on 22.07.2016 demanding an amount of Rs. 8,64,71,256/-against the Corporate Debtor and Personal Guarantors by invoking the personal guarantees.
III. In the meantime, a meeting was convened by the Corporate Debtor , Financial Creditor and other lenders in the presence of the Finance Minister to discuss the restructuring of loan facility and repayment of the arrears and a decision was arrived at the meeting to grant reasonable opportunity to the Corporate Debtor to settle the arrears. But the Corporate Debtor continued the default. Hence, the Applicant filed OA No 156/2018 before the DRT on 28.02.2018. Thereupon vide Letters dated 06.12.2018, 13.12.2018 and 11.01.2019, the Corporate Debtor submitted a One-Time Settlement (OTS) proposal to settle the dues of Rs.8.15 Cores within 180 days. The Applicant approved the OTS proposal vide sanction letter dated 22.01.2019 and the same was acknowledged by the Corporate Debtor. The Corporate Debtor sought time till 20.02.2019 for payment of 5% advance amount under the OTS Scheme. In terms of the OTS, the liabilities of the Financial Creditor have to be repaid by the Corporate Debtor on 30.06.2019. However, the Corporate Debtor failed to adhere to the terms of OTS and committed default in repayment of the outstanding liabilities. Hence the Applicant initiated CIRP against the Corporate Debtor filing IBC on 12.10.2019 and this Tribunal admitted the application on 07.02.2020 and initiated CIRP. The outstanding liabilities of the Corporate Debtor as on the insolvency commencement date of the Corporate Debtor i.e. on 30.11.2019 is Rs.14,24,90,488/-.
IV. On 09.11.2021 under Section 95(4)(b) of IBC, the Creditor Bank has issued demand notice to the Personal Guarantors.
➢ Notice issued to the personal guarantor Dr. Asalatha Nair returned as ‘not claimed’. Thereafter, notice was issued to the correct address of the Respondent, but the Respondent Dr. Asalatha Nair intentionally not accepted the Notice. Hence there is a deemed service of notice under Sec 27 of the General Clauses Act. The Respondent has neither paid the dues nor she sent any reply within 14 days from the date of receipt of the demand notice.
➢ However, the notice issued to Dr. Bharath Chandran was delivered on 26.11.2021. The Respondent had neither paid the dues nor sent a reply to the notice.
➢ Similarly, the notice issued to Shri. P.A Ahammed was delivered on 24.11.2021, and he sent a reply dated 03.12.2021 stating that the Financial Creditor is undergoing resolution under I&B Code,2016 and once the resolution is finalized, liability would be discharged without any difficulty. It is also stated that the debt is barred by limitation on the ground that demand notice was initially issued on 22.07.2016 calling upon to pay the amount on or before 22.09.2016 and hence proceedings ought to have been initiated on or before 21.09.2019. However, he has not paid any amount within 14 days from the date of receipt of the demand notice.
We have heard the learned counsel for Applicant Shri. Vinod P.V as well as learned Resolution Professional Shri. Raj Mohan through Video Conferencing. In this connection, it is profitable to quote Section 95 of I&B Code,2016: -
“(1)A creditor may apply either by himself, or jointly with other creditors, or through a resolution professional to the Adjudicating Authority for initiating an insolvency resolution process under this section by submitting an application.
(2)A creditor may apply under sub-section (1) in relation to any partnership debt owed to him for initiating an insolvency resolution process against— (a) any one or more partners of the firm; or (b) the firm.
(3)Where an application has been made against one partner in a firm, any other application against another partner in the same firm shall be presented in or transferred to the Adjudicating Authority in which the first mentioned application is pending for adjudication and such Adjudicating Authority may give such directions for consolidating the proceedings under the applications as it thinks just.
(4)An application under sub-section (1) shall be accompanied with details and documents relating to— (a) the debts owed by the debtor to the creditor or creditors submitting the application for insolvency resolution process as on the date of application; (b) the failure by the debtor to pay the debt within a period of fourteen days of the service of the notice of demand; and (c) relevant evidence of such default or non-repayment of debt.
(5)The creditor shall also provide a copy of the application made under sub-section (1) to the debtor.
(6)The application referred to in sub-section (1) shall be in such form and manner and accompanied by such fee as may be prescribed.
(7)The details and documents required to be submitted under sub-section (4) shall be such as may be specified.”
In view of the above provision and that the applicant has complied with Section 95(4) quoted above and also that the demand notice dated 09.11.2021 was sent to the respondents, however, the respondents failed to make the payment, we have come to the conclusion that there is a default on the part of the Personal Guarantors/Respondents by not fulfilling the debts owed to the Corporate Debtor as per the clauses contained in the Consent Terms in respect of the outstanding financial debt which is apparent from the documents placed on record. Hence, this Tribunal ordered as under: -
ORDER
I. All the aforesaid applications filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 7(2) of the Insolvency and Bankruptcy Rules, 2019 by Dhanalaxmi Bank Ltd against Personal Guarantors of the Corporate Debtor M/s. Trivandrum International Health Services Ltd are allowed with the following directions: -
II. The interim moratorium under Section 96(1) (a) of the Insolvency and Bankruptcy Code, 2016 has commenced on the date of filing of these applications by the Creditor in relation to all the debts and will cease to have effect on the date of admission
III. During such interim-moratorium period-
any legal action or proceeding pending in respect of any debt shall be deemed to have been stayed; and
the creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt.
IV. Since the applicant/creditor has suggested the name of Mr. Raj Mohan R as the Resolution professional who has produced the Form B along with these applications, and he has stated in Part IV of the application that he is not currently serving in any process under IBC, this Bench appoints Mr. Raj Mohan R, an Insolvency Resolution Professional having Registration No: IBBI/IPA-001/IP-P-02331/2020-2021/13517, office at Rajbhavan, HS 514/12/1and 175A, , Krishnapuram, 6th street, Ollukkara PO. ,Krishnapuram temple ,Thrissur, Kerala ,680655 [e-mail id – [email protected]] as the Resolution Professional (RP) to carry out the functions as mentioned under the Insolvency and Bankruptcy Code, 2016. The fee payable to the Resolution Professional (RP) shall be in accordance with the Insolvency and Bankruptcy Board of India (IBBI) Regulations/ Circulars/ Directions issued in this regard.
V. That this Bench also directs for an advance payment of Rs.2,00,000 (Rupees Two Lakhs only) to be paid by the Applicant/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).
VI. The Resolution Professional, shall exercise all the powers as enumerated under Section 99 of the Code read with Rules made thereunder. He is directed to make the recommendations with reasons in writing for acceptance or rejection of this Application within ten days from the date of receipt of this order, as envisaged under the provisions of Section 99 of the Code. The Resolution Professional shall provide a copy of the report under Sub-Section 7 of Section 99 to the Creditor as well as the guarantors as soon as the same is filed before this Adjudicating Authority.
VII. The Registry is directed to immediately communicate this order to the Creditor, Personal Guarantors, Corporate Debtor and the Resolution Professional by way of an email. The Registry shall place a compliance report of this direction in this file.
VIII. List the matter for further proceedings on 20.05.2022