Punjab National Bank vs Bhabani Prasad Mukherjee

The instant application has been filed by the resolution professional (hereinafter to be referred “the applicant”) under Section 105, 112 and 113 of the Insolvency and Bankruptcy Code, 2016 (for short “IBC 2016) read with rule 11 of the NCLT Rules, 2016 seeking following relief:

Briefly stated the facts of this application are that M/s Purulia Metal Casting Pvt. Ltd the principal borrower(hereinafter to be referred as “the Corporate Debtor”) availed credit facilities from the Financial Creditor from time to time for its business purpose; and to secure the aforesaid loan granted to the Corporate Debtor, Bhabani Prasad Mukharjee( hereinafter to be referred as “the Personal Guarantor”) furnished personal guarantee towards security for due repayment of the loans and advances granted to the principal debtor with interest, cost and expenses. To secure the loan, the Personal Guarantor executed several Deeds of Guarantee in favour of the Financial Creditor from time to time and lastly on 10.09.2021.

It has been submitted that in spite of disbursement of the various amounts pursuant to sanction of various credit facilities granted by the financial creditor, the said corporate debtor failed and neglected to repay the dues of the financial creditor. The loan account of the corporate debtor turned into NPA on and from 31.03.2023.

On 05.04.2023, the Financial Creditor, through letter of invocation, invoked the personal guarantee of the Personal Guarantor and demanded to pay jointly and severally with other Borrower/guarantors an aggregate outstanding amount of Rs. 75,16,58,814.64. However, despite issuance of the said notice, the Personal Guarantor failed and neglected to pay the dues as demanded.

Consequently, the Financial Creditor filed Company Petition bearing no. (IB) No. 244 (KB) of 2024 under section 95 of the IBC Code 2016 before this Tribunal to initiate Insolvency Resolution Process against the Personal Guarantor which was allowed by this Tribunal. The applicant was appointed as the Resolution Professional.

This Tribunal heard on the report filed by the applicant under Section 99 of the Code and agreed to the recommendation made by the applicant and accordingly admitted the application vide its order dated 24.10.2024; and in compliance with the order passed by the Hon'ble Tribunal, first Progress Report in respect of Personal Insolvency Resolution Process of the Personal Guarantor was submitted on 03.12.2024.

In compliance with section 102 of Insolvency and Bankruptcy Code 2018, a public Announcement was made by the applicant on 29/10/2024 in Aajkal (Bengali West Bengal Edition) & Business Standard (English, West Bengal edition) informing the public at large about the commencement of Personal Insolvency of Mr. Bhabani Prasad Mukherjee and last date to submit the claim as 19.11.2024.

On 28.10.2024, letters were sent to the Personal Guarantor at his both residential addresses with a request for furnishing certain information. The latter addressed at Purulia residence was returned back while the one sent to Kolkata was received. Pursuant to the aforesaid Public Announcement, the applicant received two claims against personal guarantor and after perusal of documents accepted the claims filed by the Creditors. The list was prepared on 28.11.2024 in terms of Section 104 of IBC, 2016.

As per section 105 of IBC, 2016, the debtor/guarantor shall prepare a repayment in consultation with Resolution Professional which shall contain a proposal of creditors for restricting of his debts or affairs. The repayment plan shall also contain the justification for the preparation of such repayment plan and reasons on which the creditors may agree upon the plan. The repayment plan shall also include a provision for payment of a fee to the Resolution Professional and such other matters as may be specified.

In terms of section 106 of IBC,2016, the Resolution Professional shall submit the repayment plan under Section 105 along with his report within 21 days from the last date of submission of claims under Section 102 specifying that the repayment plan is in compliance with the provisions of any law for the time being in force. That the repayment plan has a reasonable prospect of being approved and implemented; and whether there is a necessity of summoning a meeting of the creditors, if required, to consider the repayment plan. The relevant date of submission was on or before 10.12.2024.

To expedite the preparation of the Repayment Plan, the applicant on 26.11.2024 tried to meet the Personal Guarantor at his residential address in Kolkata, but in vain. A caretaker present there was not able to provide any clue regarding the whereabouts of him.

The Second Progress Report was submitted on 03.02.2025 with a brief report therein that on 04.01.2025, an email was sent to Dr. Anirban Mukherjee ([email protected]) s/o Sh. Bhabani Prasad Mukherjee with a request to provide the whereabouts of Sh. Bhabani Prasad Mukherjee for early preparation of repayment plan. However, no response has been received till date.

The first meeting of creditors was held on 09.01.2025, which was attended by both the financial creditors. The whereabouts of the Personal Guarantor was not known to either of the creditors and on 15.01.2025, an email was sent to both the Officer-in- Charge. Police Station- Gariahat & Officer-in-Charge. Purulia Mufasil Police Station with a request to investigate & provide whereabouts of Prasad but no response has been received till date.

The second meeting of creditors was held on 20.03.2025. The creditors despite efforts expressed their inability to meet the Personal Guarantor. They were of the view that he was in Purulia & deliberately avoiding to meet. Reminders were sent to his son and to both the police stations. Through paper publication in Ananda Bazar Patrika dt. 05.04.2025, the Personal Guarantor was once again requested to contact for preparation of repayment plan. The applicant tried to contact the Personal Guarantor, but in vain. The Statement of Affairs, as required under Regulation 10 of IBBI(Insolvency Resolution Process for PG to CD) Regulation 2019 is thus not prepared. Communications were again sent to both the recorded residential addresses at Kolkata and Purulia. The letter addressed to the Kolkata address was received. The Police of P.S. Gariahat & P.S. Purulia was also again reminded, but in vain.

In between the Circle Sastra Head, Purulia was provided an address at Raghabpur More, Purulia with a request to visit the same. The address was duly visited but the doors were found locked from inside and doors were not opened despite efforts. The Zonal Head Sashtra, Durgapur had disclosed receipt of a letter from the Personal Guarantor. The letter posted from Purulia on 17.03.2025 was received at Durgapur on 20.03.2025. The details were forwarded to Dr. Anirban Mukherjee, son of the Personal Guarantor, but there has been no response. This clearly proves that there is non-cooperation by the Personal Guarantor.

The modification in the amount of claim is permissible as per Regulation 7(7) of IBBI Insolvency Resolution Process for PG to CD) Regulation 2019. There has been a modification to the list prepared on 28.11.2024. The present position is that the claim lodged by the Punjab National Bank-CS Purlia is Rs. 82,62,87,665.53, and the claim lodged by Punjab National Bank CS-Kolkata West is Rs.25,84,335.45. The claim accepted for PNB Purlia is Rs. 62,62,87,665.52 and for PNB Kolkata West is Rs.25,84,335.45. The present claim for PNB Purlia is Rs. 35,91,85,790,52 having voting right of 99.28% and Rs. 25,84,335.45 with voting right of 0.72%. Thus total claim lodged is Rs. 82,88,72,000.97, total claim accepted is Rs. 82,88,72,000.97, total present claim is Rs. 36,17,70,125.97.

Thereafter, it was decided/resolved that the Report of meeting of creditors on repayment plan to be filed by the applicant u/s 112 of IBC Code 2016 read with Regulation 19(1) for orders u/s 114. The CoC, in its 3^rd meeting held on 19^th April 2025 held by videoconferencing, unanimously agreed and resolved that the Personal Guarantor was deliberately avoiding to meet the applicant and has no intention of preparation of a Repayment Plan. Therefore, an Application is required to be filed under Section 112 of IBC, 2016 read with Regulation 19(1) of the IBBI (Insolvency Resolution Process for PG to CD) Regulations, 2019.

The Creditors requested the Chairman to open the e-voting on April 22, 2025 at 10:00 am and the creditors with 99.28% voting rights voted in favour of resolution and creditors with 0.72% voting rights remained absent and accordingly, resolution was passed as above. Subsequently, it has come to public notice that the Personal Guarantor has been arrested on 25.04.2025. Therefore, a prayer has been made to allow the present application.

We have heard the learned Resolution Professional and perused the entire record of the present case. We have duly appreciated the law applicable on the facts and circumstances of this application.

As per section 105 of IBC 2016 the debtor shall submit repayment plan, then the Resolution professional shall submit the repayment plan along with his report to the adjudicating Authority. After conducting the meeting of creditors on the repayment plan, the Resolution professional shall prepare a report of the meeting of creditors and submit it to the Adjudicating Authority. The Adjudicating Authority may then pass an order either approving or rejecting the report. But in the case before us, in the absence of any repayment plan filed by the personal guarantor, the procedure could not be carried out. The non-filing of repayment plan causes a similar effect of rejection of repayment plan under section 114 as provided under section 115(2) of IBC 2016.

The report of the Resolution Process under section 112 IBC is filed stating that the Personal Guarantor is unable to respond despite best effort made by the Resolution Professional and accordingly, failed to receive Repayment Plan from the Personal Guarantor. Accordingly, the same is non-presentation of the Repayment Plan.

Section 113 provides for notice of decisions taken at meeting of creditors and the Resolution Professional shall provide a copy of the report of the meeting of creditors prepared under Section 99 of the IBC Code 2016 to the (a) the debtor; (b) the creditors, including those who were not present at the meeting; and (c) the Adjudicating Authority.

The Resolution Professional, the applicant is of the view that since the Personal Guarantor is unable to provide for Repayment Plan, the Insolvency Resolution Process of the Personal Guarantor shall be concluded and the further course of action i.e. Bankruptcy of Personal Guarantor may be initiated.

The resolution professional, in compliance with Section 113 of the IBC Code, forwards a copy of the report of meeting of the Creditor prepared under Section 99 of the IBC Code 2016 to the Creditor and debtors including those who were not present at the meeting.

Since the Personal Guarantor is unable to present the Repayment plan despite sufficient opportunity granted by the Resolution Professional and hence, in the given circumstances, the present IA stands allowed and as provided under section 115(2) of IBC 2016. The debtor and creditors shall be entitled to an application for bankruptcy under Chapter IV.

Thus, this application (IA No. 753/KB/2025) is allowed and CP (IB) No.244(KB)/2024 stands disposed of.

The Court Officer is hereby directed to forward the copy of this order to the IBBI as provided under section 115(3) of IBC 2016.

File be consigned to records.