Mr. Satheesh Babu V.K. vs Dileep K.P., Resolution Professional

[Per : Justice Sharad Kumar Sharma, Member (Judicial)]

These are bunch of six Company Appeals, all preferred by invoking the provisions under Section 61 of the I & B Code, 2016.

Comp App (AT) (CH) (Ins) No.424/2023, 425/2023, 426/2023 & 427/2023 have been preferred by the Appellant Mr. Satheesh Babu V.K, Mr. Saleesh K Satheesh, Mr. Rajesh K.S and Bindya Saleesh being aggrieved as against the common impugned order dated 13.10.2023, that was passed in IA(IBC)/4/KOB/2023 in CP(IB)/16/KOB/2022, IA(IBC)/5/KOB/2023 in CP(IB)/17/KOB/2022, IA(IBC)/3/KOB/2023 in CP(IB)/15/KOB/2022, IA(IBC)/6/KOB/2023 in CP(IB)/18/KOB/2022 respectively. The Appellants herein are personal guarantors, and the Interlocutory Applications had been preferred by the RP, Respondent herein, under Section 114 of the I & B Code, 2016, to be read with Regulations 20 & 22 of IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, before the Learned Adjudicating Authority. Learned Adjudicating Authority after hearing both sides, proceeded to pass impugned order observing that, the Resolution Professional in his report filed as per the provisions contained under Section 112 of the I & B Code, 2016, had stated that, no repayment plan, has been submitted by the personal guarantor which they were required to file under Section 105 of the I & B Code, 2016, and that non-filing of the respective repayment plan will have the same effect of rejection of the repayment plan, which will attract the provisions under Section 115(2) of I & B Code, 2016, and therefore the debtor and the creditors shall be entitled to file an application for bankruptcy under Chapter IV of the code, and a moratorium, thus which was declared under Section 101 of the I & B Code, 2016, shall cease to have its effect from the date of issue of this order.

Brief facts of the case involved in these 4 Company Appeals are that insolvency resolution process was initiated as against the Appellants herein and one Mrs. Sindhu Rajesh, who were personal guarantors to M/s. Propyl Packaging Limited (Corporate Debtor), by way of applications filed by State Bank of India under Section 95 of the I & B Code, 2016, the IRP was appointed under Section 97 of the Code and based on the report of IRP (Respondent herein) the applications filed under Section 95 were admitted vide order dated 22.06.2022 and the aforesaid personal guarantors were admitted into IRP proceedings.

Consequent to this, a public announcement was made on 29.06.2022, intimating the commencement of insolvency resolution process as against the said personal guarantors and inviting claims for creditors. The claims, which stood admitted qua the personal guarantors, are given hereunder: -

All the personal guarantors were asked to submit repayments plans, but they failed to submit the same. On account of stay granted by Hon’ble Apex Court in respect of Mrs. Sindhu Rajesh and due to ongoing liquidation process. Further time was given, but still no repayment plan was received. Finally, CoC in the meeting 16.12.2022 decided to move the application under Section 114 of I & B Code for appropriate orders. After considering the submissions of both sides and the documents on record and especially the report of RP that was filed under Section 112 of the I & B Code, 2016, Learned Adjudicating Authority observed that despite meetings and deliberations that were held between the personal guarantors and the Committee of Creditors, no viable repayment plan for the debt due, was filed and that the objections raised by the opposite party, is only to keep the proceedings pending for no valid and justifiable reasons and accordingly proceeded to pass the following orders:-

Aggrieved by the said order, these 4 Company Appeals have been filed before this Tribunal.

When these Company Appeals were taken up for consideration by this Appellate Tribunal, an interim order, was granted on 11.12.2023, and that remains in operation, owing to the statement that made by the Respondent, i.e., the Resolution Professional, he has not proceeded with the bankruptcy proceedings. The grounds taken by the Appellants are that they could not submit the repayment plan because one of the personal guarantors got stay from Hon’ble Apex Court, the remaining 4 cases were exactly similar and they were availing the verdict of Hon’ble Apex Court which was delivered in Writ Petition (Civil) No 1281 of 2021, Dilip B Jiwrajka Vs Union of India & Ors and that they were not sure of the exact dues because of the pendency of liquidation proceedings. Meanwhile, the State Bank of India, who had initiated Section 95 proceedings as against each of the personal guarantors by filing Company Petitions, has preferred the Intervention Applications in all these 4 Company Appeals as detailed hereunder: -

The State Bank of India, Stressed Asset Resolution Branch (SARB), has sought to justify filing of Intervention Application in each of these Company Appeals on the ground that they had extended various financial assistance to the Corporate Debtor, M/s. Propyl Packaging Limited, that in view of the default committed by the Corporate Debtor, they had initiated a proceeding under Section 7 of the I & B Code, 2016, as against the Corporate Debtor, consequent to which, the Learned NCLT has admitted the Corporate Debtor, to face the CIRP by an order passed by Learned NCLT on 14.02.2020, that later the Corporate Debtor was ordered for liquidation vide order dated 18.11.2021 in IA(IBC)/106/KOB/2021, that it decided to invoke personal guarantee of the personal guarantors to the Corporate Debtor and filed application under Section 95 of I & B Code, 2016, for initiating insolvency resolution process, against personal guarantors that the applications were admitted and because the personal guarantors did not submit any repayment plan, order was passed by Learned Adjudicating Authority permitting State Bank of India to file for application for bankruptcy, against which the instant appeals have been filed. The Applicant State Bank of India has further contended that the Appellants have not made him as party in the Appeals, that he is likely to be affected if any decision is taken in the Company Appeal, that because of interim order he is unable to recover his dues and therefore he will be a necessary party to be heard in the instant appeal and to make his submissions in the interest of justice.

The justification for intervention by State Bank of India was considered by us in detail. Since, the proposed applicant intervenor, is the petitioner who had initiated of the proceedings under Section 7 of the I & B Code, 2016, as well as Section 95 of the I & B Code, 2016, as against the personal guarantors, we are of the view that the applicant will be a necessary party to the said Appeals. Further, the Intervention Applications are not opposed by the respective Appellants.

When this Intervention Application was filed, the Applicant State Bank of India gave an oral proposal, during the course of argument that, in the event, if the Appellants are agreeable to submit the repayment plan now, the same would be directed, to be considered in the light of the provisions contained under Section 106 of the I & B Code, 2016. The same was incorporated in the order that was passed by us on 17.09.2025, where we have recorded that, an oral proposal has been extended by the proposed intervenor, i.e., “State Bank of India”, that they will be amenable to extend the time period for the purposes of submission of the revised plan for which the parties agreed to complete their necessary instructions and make a statement. The relevant observations made by us in the order of 17.09.2025, is extracted hereunder: -

On 08.10.2025, when the arguments continued on the Intervention Application, the Appellant in each of the Company Appeal have agreed to allow the Intervention Application. Accordingly, the above Intervention Applications being IA Nos.1210/2025, 1214/2025, 1215/2025 & IA No.1226/2025 would stand allowed and the Appellants are directed to carry out the necessary amendments in the cause title of the appeal before issuance of the certified copy of this order. Further, the intervenor State Bank of India has filed a memo dated 08.10.2025 outlining its offer of extending a time period of 30 days for Appellants to submit a repayment plan subject to certain terms and conditions as narrated therein. The relevant undertaking given by the State Bank of India in the memo dated 08.10.2025 is extracted hereunder: -

Owing to the aforesaid undertaking, as observed in the order passed by us on 17.09.2025, as well as in the memo, as filed by the State Bank of India, in its para 5 & 6 as extracted above, and in view of the consent extended by the parties, as we are granting time to the Appellants for submission of the repayment plan within the time frame as proposed by State Bank of India which will then be processed by RP for further steps as per provisions of Section 106 of the code and in accordance with the procedure contemplated therein, the impugned order dated 13.10.2023 would hereby stand quashed, and the Company Appeals being Comp App (AT) (CH) (Ins) Nos.424, 425, 426 & 427/2023 would stand allowed in terms of the directions given as above. All Interlocutory Applications accordingly would stand closed. Compliance of Section 106, would be from the date of uploading of this Judgment.

There are two other Company Appeals in this bunch of appeals being Comp App (AT) (CH) (Ins) No.113/2024 & Comp App (AT) (CH) (Ins) No.114/2024 as respectively preferred by Satheesh Babu VK and Saleesh K Satheesh challenging the order of Learned NCLT dated 14.02.2024, by virtue of which application filed by State Bank of India to initiate bankruptcy under Section 121(b) and 123(1) of I & B Code has been admitted in CP(IBC)/06/KOB/2024 and in CP(IBC)/07/KOB/2024.

It is seen that due to the non-submission of the repayment plan, the proceeding was drawn under Section 114 of the I & B Code, 2016, to be read with Regulations 20 & 22 of IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, and consequent to passing of orders dated 13.10.2023 permission was given to Financial Creditor to initiate bankruptcy proceeding. We have already decided in the context of the present Appellants, by this judgment as rendered in Comp App (AT) (CH) (Ins) No.424/2023 and Comp App (AT) (CH) (Ins) No.425/2023, where the order of 13.10.2023 has been quashed and the Appeals have been allowed, with the liberty left open for the Appellants to submit their repayment plan in the light of the provisions contained under Section 106 of the I & B Code, to be read with the undertaking given by the Intervenor State Bank of India in the memorandum submitted before this Appellate Tribunal.

Owing to the order that has been passed by us in the aforesaid two Company Appeals preferred by the Appellants of the present Company Appeals, and owing to the stand taken by State Bank of India has that they would be withdrawing the applications that was filed by them against the Appellant under Section 123 of the I & B Code, 2016, with the rider that, all their rights are reserved to have recourse to law, as available under the I & B Code, consequent to the grant of the further extension, subject to the submission of the repayment plan and its consequential consideration, which is given in para 7 of the memorandum submitted by them as extracted hereunder: -

The impugned order dated 14.02.2024 as rendered in CP(IBC)/06/KOB/2024 & CP(IBC)/07/KOB/2024, as passed under Section 123 of the I & B Code, 2016, would hereby stand quashed and both the Company Appeals stand allowed, subject to satisfying of the conditions passed in the Comp App (AT) (CH) (Ins) No.424/2023 & 425/2023 respectively. All Interlocutory Applications would stand closed. Let a copy of this order be placed on the records of each of the Company Appeals.