Saurabh Bharatbhushan Jain vs State Bank Of India & Ors.

"Heard, Learned Counsel for the Applicant/Personal Guarantor and perused the records. We hereby appoint Mr. Sunil Kumar Agarwal, having registration number IBBI/IPA-001/IP-P01390/2017-2018/12178 as IRP in respect of the Applicant/Personal Guarantor with direction to submit the report under Section 99 of the IBC Code, 2016 within ten days. Let copy of the petition as well as this order be serve upon the concerned IRP for preparing the Report under Section 99 of IBC, 2016 by the Applicant/Personal Guarantor. A perusal of the IBBI site reveals that the AFA of the said IRP is valid till 04.12.2024

The IRP is required to examine the Application as set out in Section 97(6) of IBC, 2016 and after examining the Application, as per Section 97(7) of the IBC, 2016 the IRP may recommend for the acceptance or rejection of the Application in his report, within a period of 10 days as contemplated under Section 99(1) of the IBC, 2016.

Let report by filed through separate IA in this matter by the IRP after serving the same on the Financial Creditor/Operational Creator as well as Corporate Debtor.

All challenges to the present application, if any, to be taken up at the time, when necessary, order under Section 100 of the IBC Code, 2016 is to be passed by this Tribunal.

Let copy of this order be served upon the IRP by the Applicant & Registry within three days.

Accordingly, C.P. (IB)/ 166(AHM) 2024 is ordered."

i.

It is submitted that the Applicant herein was appointed by the Hon'ble Adjudicating Authority and Personal Guarantor and Registry of Hon'ble NCLT was directed to serve copy of application along with intimation with respect to appointment of Applicant as Interim Resolution Professional (hereinafter referred as "IRP"). However, it is pertinent to mention that the Applicant came to know about the appointment on 03.10.2024 and till date no communication with respect to appointment was received from anyone to the Applicant.

ii.

It is submitted that the Applicant came to knowledge of appointment as RP unofficially on 03.10.2024. Thereafter, the Applicant, being an officer of the court sent an email communication dated 04.10.2024 to Financial Creditors i.e. State Bank of India, Nutan Nagrik Sahakari Bank Limited, Siemens Financial Services Pvt. Ltd., Jain Sons Finlease Ltd. (Ashvfinance) to provide relevant details including the copy of Application with annexures in CP(IB)/166(AHM)2024. Copy of email and letter dated 04.10.2024 by Applicant to Financial Creditor is annexed hereto and marked as Annexure -B.

iii.

It is further submitted that none of the Financial Creditors reverted to Applicant except Respondent no. 3 Nutan Nagrik Sahakari Bank Limited via email dated 10.10.2024 providing RP with some information/documents required for compliance of RP Report. Copy of email communication dated 10.10.2024 by Nutan Nagrik Sahakari Bank Limited to RP is annexed hereto and marked as Annexure-C.

iv.

That it is submitted that Personal Guarantor did not cooperate and did not provide the copy of application. There was no communication from the personal guarantor and therefore it is requested from this Hon'ble Tribunal to pass appropriate orders against the Personal Guarantor for non- cooperation.

v.

That since the copy of application was served upon corporate debtor, the RA who had taken over the Corporate Debtor provided copy of application to Applicant to form an opinion on the application under Section 94.

vi.

The present application is filed in compliance of order dated 10.05.2024 which came to knowledge of Applicant on 03.10.2024 unofficially.

a)

That the Application filed by the Guarantor satisfies the requirement as set out in Section 94 of the Code.

b)

That the Corporate Debtor, M/s Sysco Industries Limited, has committed default in repayment of Loan Facility granted by the Creditor State Bank of India".

c)

That Saurabh Bharatbhushan Jain, Personal Guarantor to M/s Sysco Industries Limited has also committed default in repayment of Loan Facility demanded by the Creditor 'State Bank of India".

d)

The personal guarantee has been invoked by State Bank of India.

e)

That Saurabh Bharatbhushan Jain, has not denied the existence of debt.

f)

That, in light of the above, it is just and equitable that insolvency resolution process be initiated against Saurabh Bharatbhushan Jain, Personal Guarantors to M/s Sysco Industries Limited under the orders and directions of this Hon'ble Tribunal.

1.

The Personal Guarantor has not come with clean hands having siphoned off the funds from corporate debtors by entering into transactions with related parties as is evident from the Order of this Hon'ble Tribunal referred to in paragraph 13 above.

2.

The Personal Guarantor has defrauded the banks in respect of credit facilities / finance availed by Sysco India Private Limited where he and his immediate relatives are personal guarantors. The amount realized from sale of hypothecated stocks has not been deposited in the account.

3.

The Personal Guarantor has been declared as a Wilful Defaulter by SBI and cannot seek any relief for his defaults.

4.

The Bank has already reported to RBI under Fraud Reporting System as stated hereinbefore.

5.

The Personal Guarantor has scant respect for this Hon'ble Tribunal having neglected responding to the mail communication of the IRP.

6.

The CP(IB) 166(AHM)/2024 is filed in cavalier manner without any intention to submit concrete Repayment Plan.

7.

The Application of Personal Guarantor is an attempt to negate the action under SARFAESI as well as the Arbitral Award against Sysco India Private Limited and to stall the Execution Petition filed by the Bank and which is pending before the Court at Surat.

8.

This Hon'ble Tribunal may please consider the above contentions and objections of the Bank in interest of justice.

a. Admit the application filed by the Resolution Professional under Section 99 of the Insolvency and Bankruptcy Code to initiate the Personal Insolvency Resolution Process (PIRP) against the Personal Guarantor as per the provisions of the Insolvency and Bankruptcy Code.

b. The Hon'ble Tribunal admit the application filed by the Personal Guarantor under Section 94 of the IBC. The Personal Insolvency Resolution Process (PIRP) be initiated against the Personal Guarantor in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.

c. Pass such other orders or directions as the Hon'ble Tribunal may deem fit and proper in the interest of justice.

"Let notice be issued to the Personal Guarantor, Financial Creditors as well as the Corporate Debtor as well as to the Ld. Counsel for the Personal Guarantor Mr. Mohit Gupta, specifically to explain that after obtaining the order of the Tribunal in C.P.(IB)/166(AHM)2024 what steps were taken for informing the IRP as well as in compliance of the order of this Tribunal and place on record the proof of the same.

The applicant is directed to collect the notices from the registry within three days and serve upon the Personal Guarantor, Financial Creditors as well as the Corporate Debtor along with copy of this order through Registered Ad post, Speed-post, Dasti mode as well as paper book on the registered email ID within seven days from the date of this order. The Personal Guarantor, Financial Creditors as well as the Corporate Debtor are directed to reply within a week from the date of receipt of notice. Rejoinder, if any, be filed thereafter before the next date.

Proof of Service be filed by way of an affidavit before the next date of hearing."

1.

"Further, in compliance with the notice issued by this Tribunal to the Counsel for the personal guarantor, Mr. Mohit Gupta, Advocate, appears personally and admits the lapse on the part of the office of the Advocate as well as the personal guarantor for not communicating/serving the first order of this Tribunal dated 10.05.2024, to the IRP, which was appointed by this Tribunal.

2.

However, Learned Counsel for the applicant / RP has drawn our attention to the address given by the personal guarantor in the petition as well as other relevant documents before the financial creditor, i.e., 23, Vasundra Society, Behind Big Bazar, Vesu, Surat.

3.

Further, in the service report, the applicant / RP has specifically made a remarks that the address is under construction, and the personal guarantors, Mr. Saurabh Jain, as reverted only through email to the IRP on 15.11.2024. Further, the IRP who presents through virtual mode confirms that the personal guarantor is not residing at the given address as the property is under construction.

4.

Let the personal guarantor remain physically present on the next date of hearing and explain as to why a wrong address was given in the petition and appraise the correct address to this Tribunal. The personal guarantor also to explain the lapse on oath as this Tribunal is not satisfied with the explanation given by the Ld. Counsel for the personal guarantor.”

“In compliance of last order, though the personal guarantor is physically present in person. However, no explanation affidavit on oath has been filed as to why a wrong address was given in the petition as well as the lapse on the part of the personal guarantor for not communicating/serving the first order of this Tribunal dated 10.05.2024, to the IRP, which was appointed by this Tribunal. The personal guarantor is again directed to file explanation affidavit on oath as to why a wrong address was given in the petition as well as the lapse on the part of the personal guarantor for not communicating/serving the first order of this Tribunal dated 10.05.2024, to the IRP, which was appointed by this Tribunal.”

“In compliance with the extended order of explanation sought by this Tribunal from the personal guarantor dated 06.12.2024, an affidavit of explanation in the shape of an affidavit in reply by the personal guarantor has been filed on 17.12.2024, vide inward diary No. D-9053, giving the following explanation:

2.

I further state that the address mentioned in the said application is 23, Vasundhara Society, behind Big Bazaar, Vesu, Surat City, Surat, Gujarat -395 007. I state that I was residing at the said address along with my family since the year 1997. However, the aforesaid property had been mortgaged by my father to the State Bank of India against credit facilities availed by the Corporate Debtor, Sysco Industries Ltd. I further state that the State Bank of India took physical possession of the property and subsequently sold it to a third party during the years 2022-2023 under the provisions of the SARFAESI.

5.

I state that this Hon'ble Tribunal, vide its order dated 10.05.2024, was pleased to appoint the Applicant as the Interim Resolution Professional (IRP) in the matter. The Hon'ble Tribunal further directed the Applicant and the Registry to serve a copy of the said order within three days. I regretfully state that I did not carefully review the order at the time and was unaware of this specific direction. I sincerely apologise for this lapse on my part. I humbly submit that the oversight was unintentional and without any mala fide intent, particularly as the co-guarantor had also preferred a petition under Section 94 of the IBC, wherein the order was duly communicated and the final moratorium order was passed.

6.

I sincerely apologise for the mistake and I undertake to withdraw the main CP (IB) No. 166 of 2024 to rectify the defects in the application.

Through this affidavit, the Personal Guarantor tendered apology for the mistake and undertakes to withdrawn the main C.P. (IB)/166(AHM) 2024 to rectify the defects in the application.

Learned Counsel for the IRP seeks indulgence to file a response to this affidavit. Let same be filed, within a period of seven days. Meanwhile, the Personal Guarantor also undertakes to approach the IRP. “

1.

The Personal Guarantor submits that the address mentioned in the said application is 23, Vasundhara Society, behind Big Bazaar, Vesu, Surat City, Surat, Gujarat -395 007. I state that I was residing at the said address along with my family since the year 1997. However, the aforesaid property had been mortgaged by my father to the State Bank of India against credit facilities availed by the Corporate Debtor, Sysco Industries Ltd. I further state that the State Bank of India took physical possession of the property and subsequently sold it to a third party during the years 2022-2023 under the provisions of the SARFAESI Act, 2002. I state that the third party who purchased the property must have demolished the house constructed over the plot.

2.

I respectfully submit that the mention of the aforesaid address in the Section 94 application was inadvertent and an oversight. This address was included because it was reflected in the loan documents and prior applications filed before various Courts.

3.

I state that this was a genuine and unintentional error, with no mala fide intent on my part to misrepresent or avoid service of notice. I further affirm that my correct email ID was mentioned in the application, and I received the notice issued by this Hon'ble Tribunal via email, as per the order dated 08.11.2024.

4.

I state that this Hon'ble Tribunal, vide its order dated 10.05.2024, was pleased to appoint the Applicant as the Interim Resolution Professional (IRP) in the matter. The Hon'ble Tribunal further directed the Applicant and the Registry to serve a copy of the said order within three days. I regretfully state that I did not carefully review the order at the time and was unaware of this specific direction. I sincerely apologise for this lapse on my part. I humbly submit that the oversight was unintentional and without any mala fide intent, particularly as the co-guarantor had also preferred a petition under Section 94 of the IBC, wherein the order was duly communicated and the final moratorium order was passed.

1.

That in pursuant to order dated 17.12.2024, Personal Guarantor visited Resolution Professional on 24.12.2024 wherein Resolution Professional explained the procedure for Personal Guarantor under Insolvency and Bankruptcy Code, 2016. Further, RP also stated cost incurred till date to the Resolution Professional as on date in Petition bearing C.P.(I.B) No. 166 of 2024 filed by the Personal Guarantor.

2.

That Resolution Professional informed Personal Guarantor cost incurred by the Resolution Professional till date amounting to Rs.2,95,740/- being calculated from 03.10.2024 to 17.12.2024. The cost sheet has also been circulated to Personal Guarantor vide email dated 23.12.2024. Copy of e-mail dated 23.12.2024 sent by Resolution Professional to Personal guarantor along with cost sheet is annexed hereto and marked as Annexure-B.

3.

That Personal Guarantor agreed to pay the entire Cost shared with him, in the event of withdrawal of the present Company Petition bearing C.P.(I.B.) NO. 166 OF 2024. That Personal Guarantor further communicated that, he wants to pursue Section 94 Petition and submit a repayment plan as per the provisions of the Insolvency and Bankruptcy Code, 2016 and Resolution Professional took note of the same.

4.

On 06.01.2025, Applicant herein sent an email stating that he wishes to withdraw the Application and cure the defects accordingly. Hence, RP seeks liberty from this Hon'ble Tribunal to file appropriate application for withdrawal of C.P.(I.B.) NO. 166 OF 2024 subject to entire cost be paid by the Personal Guarantor as incurred till disposal of withdrawal application. Copy of email dated 06.01.2025 is attached hereto and marked as Annexure- C. Copy of updated cost sheet till 07.01.2025 is attached hereto and marked as Annexure-D.

5.

In view of the above facts, it is herein prayed that the Hon'ble Tribunal be pleased to consider this affidavit and pleased to pass appropriate orders and grant liberty to Applicant to file affidavit further is required in the interest of justice.

“Through this affidavit, the Personal Guarantor tendered apology for the mistake and undertakes to withdrawn the main C.P. (IB)/166(AHM) 2024 to rectify the defects in the application.”