Punjab National Bank vs Prashant Brother

Ld. Counsel on both sides present.

Under consideration is an Application CP(IB)/642(KB)2020 has been filed under section 95(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC, 2016”) r/w rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtor) Rules,2019 (hereinafter referred to as “IB Rules, 2019”) and regulation 4(2) of IBBI (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 (hereinafter referred to as “IB Regulations, 2019”) for initiating the Insolvency Resolution Process (hereinafter referred to as “IR Process”) against personal guarantor, viz., Mr. Prashant Bothra, of M/s Kohinoor Steel Pvt.Ltd. (CIN: U27109WB2005PTC101723) (hereinafter referred to as “KSPL”).

The factual matrix of the case is that the Applicant is a banking company incorporated under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. and “KSPL” and guarantor had approached the applicant seeking grant of various financial facility. On the representations made by Kohinoor Steel Pvt.Ltd, the Applicant vide Facility Agreements dated 29/06/2015 executed between the Applicant and “KSPL”, has extended credit facility to the borrower. As per the Facility Agreement, “KSPL” was obliged to repay the Principal sum of loan along with interest thereon in accordance with repayment schedule as set out in the agreement. The Deed of Guarantee was executed on 29/06/2015.The “KSPL”and the guarantor had failed and/or neglected to make payment as per terms of the said Facility Agreement. Thereafter, the applicant had classified the account of the ““KSPL”” (Corporate Debtor) as non-performing assets 30.05.2017 as per RBI norms and the applicant / Financial Creditor issued Recall Notice under section 13(2) of the SARFAESI Act, 2002 to the Guarantor/ Respondent on 11/01/2018. The applicant issued Legal Notice to the Guarantor by invoking the personal guarantee on 25/05/2018.

The applicant had filed an application before the Debt Recovery Tribunal-I at Kolkata being OA No. 484/2018 on 12/06/2018. However, the applicant failed to realise its dues. Meanwhile, “KSPL” (Corporate Debtor) was admitted to CIRP by this Bench vide order dated 20.11.2019 passed in CP(IB) No. 82/KB/2019 (Rahul Carbon Commercials Pvt. Ltd. Vs. M/s Kohinoor Steel Pvt.Ltd.).

The personal guarantor viz Mr. Prashant Bothra has executed personal guarantees on 29.06.2015 in favour of the Applicant to secure the repayment of the principal amount of the Facility Agreements together with all interest, additional interest, liquidated damages, premium on repayments, reimbursement of all costs, charges and expenses and all other obligations payable by “KSPL” in respect of the Facility Agreement. The Applicant has issued a Demand Notice in Form B on 27.01.2020 under Rule 7(1) of the IB Rules, 2019 but no response. A copy of the Demand Notice along with its annexures has been annexed to the petition as Annexure-H (Page No. 261-263)

In this factual conspectus, the applicant prays for initiation of insolvency resolution process.

The applicant has clearly brought it out in its application coupled with admissible evidence that the personal guarantor has committed default in making payment of the cash credit facility along with interest to the Applicant for which he has given the personal guarantee to the Applicant on behalf of “KSPL”.

It is made known to everyone that on filing this Application by the Applicant/Creditor the interim-moratorium commences under section 96(1)(a) of IBC, 2016 in relation to all the debts of the personal guarantor and shall cease to have effect on the date of admission of this Application and during the interim-moratorium period the following is prohibited:

The Applicant/Creditor has proposed name of Mr. Sajjan Kumar Dokania, Insolvency Professional for appointment as Resolution Professional, who has given his written consent under regulation 4(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 in Form A. Therefore, Mr. Sajjan Kumar Dokania, IBBI Registration No. IBBI/IPA-003/IP-N000150/2017-2018/11729; is hereby appointed as Resolution Professional in exercise of the power conferred under section 97 of the IBC, 2016 on this Authority subject to the regulation 4(1) and (2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019.

The Resolution Professional shall exercise all the powers as enumerated under section 99 of the IBC, 2016 r/w the Rules made thereunder. He is directed to make the recommendations with the reasons in writing for acceptance or rejection of this Application within stipulated time as envisaged under the provisions of section 99 of the IBC, 2016. The RP shall give a copy of the report under sub-section (7) of section 99 of IBC, 2016 to the Applicant/Creditor, as soon as the same is filed before this Authority.

The Counsel on record for the Applicant is hereby directed to serve the copy of this Order along with copy of the Application and documents on the Resolution Professional by all available modes for information and compliance. Proof of service shall be filed with this Bench for record.

List this matter on 14/12/2021.

The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.

Certified Copy of this order may be issued, if applied for, upon compliance of all requisite formalities.