Mathew Mylakulath Jose vs State Bank Of India

Per: Justice Rakesh Kumar Jain:

12.12.2023 : This order shall dispose of two appeals bearing CA (AT) (CH) (Ins) No. 371 of 2023 titled as Mathew Mylakulath Jose Vs. State Bank of India (herein after referred as to ‘first appeal’) and CA (AT) (CH) (Ins) No. 378 of 2023 titled as Merin Jose Vs. State Bank of India (herein after referred as to ‘second appeal’) as both the appeals have been filed against the order dated 10.08.2023 whereby application filed by the State Bank of India bearing C.P. No. 37/KOB/2021 in CP (IBC)/10/KOB/2023 (subject matter of first appeal) and CP No. 38/KOB/2021 in CP (IBC)/11/KOB/2023 (subject matter of second appeal) under Section 123 of the IBC, 2016 (in short ‘Code’) on 05.10.2021 to initiate resolution process against the present Appellants for default of an amount of Rs. 1,97,54,49,848.81/- have been admitted and both the Appellants, being personal guarantors of the Corporate Debtor, namely, ITMA Hotels Pvt. Ltd. are ordered to be bankrupt. The Tribunal appointed Padmakumar K.C. as Bankruptcy Trustee in terms of Section 125 of the Code.

In brief, the Corporate Debtor (ITMA Hotels Pvt. Ltd.) was admitted into CIRP in CP No. 30/KOB/2021 on 31.12.2021. The present appellants are the personal guarantors of the Corporate Debtor. The Adjudicating Authority passed a pre-admission order appointing Josay Stephan Kattur as Resolution Professional and directed him to file report under Section 99 of the Code. The Resolution Professional filed the report recommending for approval of the application. The Adjudicating Authority passed the order on 24.02.2022 admitting the application against which appeal filed by the Appellant before this Tribunal bearing CA (AT) (CH) (Ins) No. 262 of 2022 (in first appeal) and CA (AT) (CH) (Ins) No. 227 of 2022 (in second appeal) were dismissed on 30.08.2022. The Appellants in both the cases submitted repayment plan which was rejected by the CoC, the Resolution Professional filed the report under Section 112 of the Code and also filed an application I.A. No. 178/KOB/2022 (in second appeal) and I.A. No. 179/KOB/2022 (in first appeal) for passing order under Section 114 of the Code. The Adjudicating Authority rejected repayment plan and passed an order on 16.12.2022 under Section 115(2) of the Code permitting the debtor to file petition for bankruptcy. The present application has thus been filed by the debtor on 14.03.2023 to pass the bankruptcy order against the Appellants.

Counsel for the Appellant has been asked to disclose as to whether the order dated 16.12.2022 was challenged in appeal or not to which he replied in negative, therefore, as per Section 114(1) if the order of rejection has been passed, then the creditor is entitled to file an application for bankruptcy in terms of Section 115(2) of the Code. Therefore, in our considered opinion, the passing of the order for admission to declare the personal guarantors as bankrupt follows the order of rejection passed under Section 114(1) of the Code which has been passed in two cases on 16.12.2022 on the applications filed by the RP which is though amenable to appeal but not challenged by the present appellants.

In view of the aforesaid facts and circumstances, there is hardly any merit in the present appeals and the same are hereby dismissed. No costs.