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Judgment
As has been espoused in the captioned petition, the Petitioner (Creditor) i.e., the State Bank of India sanctioned facilities in favour of M/s Auto Décor Private Limited/ Corporate Debtor, which were reviewed and enhanced from time to time, at the request of the Corporate Debtor and the Personal Guarantors. The Corporate Debtor along with the Guarantor requested for renewal of the working capital facility. The Petitioner herein sanctioned SLC (Synthetic Letter of Credit) of Rs. 02.00 Crores vide arrangement letter dated 10.01.2013, which subsequently at the request of Corporate Debtor was converted into WCTL (Working Capital Term Loan) vide arrangement letter dated 15.03.2014, to the extent of Rs. 49.67 Crores. Again, on the request made by the Corporate Debtor, the Petitioner enhanced the overall limit of WCTL from Rs. 49.67 Crores to Rs. 51.17 Crores, vide sanction letter dated 06.04.2015. The facilities sanctioned and accorded (ibid) were secured by way of Personal Guarantee of Debtor namely, Mrs. Anuradha Sachdev, who executed the Deeds of Guarantee dated 09.07.2007, 17.12.2008, 29.09.2009, 06.10.2010, 18.05.2011, 03.10.2011, 24.03.2012, 10.01.2013, and 06.04.2015. The facilities as above were last reviewed/enhanced/sanctioned vide sanction letter dated 06.04.2015 and the documents were last executed on 06.04.2015. The Compromise Proposal for Rs.16.50 crore was sanctioned vide letter no. SAMB/17-18/CL-1/1447 dated 07.03.2018. In terms of the letter, the payment was to be made by 31.03.2018. The sanction lapsed and the deposit amount was forfeited. Thereafter, in terms of a letter dated 17.05.2018, the Corporate Debtor requested for the revival of Compromise Proposal. The Petitioner approached Debt Recovery Tribunal-II for recovery.
As has been averred in the petition, the OA No. 159 of 2017 (State Bank of India Vs. M/s Auto Décor Private Limited & Ors.) is pending for Adjudication against the Corporate Debtor. A CIRP, vide no. (IB)-530(ND)/2018 was instituted by the OC namely, M/s APPL Industries Limited, against the CD.
It was in this backdrop that the captioned petition has been filed through the RP by the Creditors i.e., State Bank of India, thereupon, Mr. Ajay Gupta having registration no. IBBI/IPA-001/IP-000140/2017-2018/10304, was appointed as a Resolution Professional under Section 97 of IBC, 2016. The RP submitted his report under Section 99 of IBC, 2016, recommending the initiation of the Insolvency Resolution Process of the Debtor. The relevant excerpts of the report read thus:
"a. In view of the above facts and circumstances, 1, Ajay Gupta, the Resolution Professional appointed by the Hon'ble Tribunal, vide order dated 14.07,2022 in C.P. IB-810/ND/2021, hereby confirm that I have perused/examined all the underlying documents and annexures and all the parameters are prescribed under the code such as: -
b. That the personal guarantor has provided irrevocable and unconditional personal guarantee in respect to the credit facilities availed by corporate debtor.
c. That the applicant has raised demand of Rs. 72,90,64,845.33/- against the personal guarantor which has been duly served upon the personal guarantor;
d. That the applicant has made application under section. 95 and provided all the details and documents relating to
i.The debt owed by the debtor as on the date of application. ii. failure of the debtor to pay the debt within a period of 14 days from service of the notice of demand and iii. evidence relating to default or non-repayment of the debt amount
e. That the personal guarantor Mrs. Anuradha Sachdev has not submitted any proof towards evidence of making payment to the applicant/bank against the amount demanded, thus in the considered opinion of the Resolution Professional there is existence of default on the part of the personal guarantor/debtor within the provisions of section 99(2) of the IBC code, 2016.
24.That due to the above all, the conditions for acceptance of application are duly triggered as per the provision of IBC and all the requisite & requirement under section 95 are duly met with, therefore, I hereby recommend acceptance of the application to this Hon'ble Tribunal that personal insolvency of Mrs. Anuradha Sachdev be initiated in accordance with Part HI based on following grounds: -
a)That the Application filed by Applicant bank, through Shri. Navjit Singh (erstwhile Resolution Professional) satisfies the requirement as set out in Section 95 of the Code;
b)That the Corporate debtor have committed default in repayment of Loan Facility granted by the aforesaid banks and/or financial institution;
c)That Mrs. Anuradha Sachdev, Personal Guarantor to Corporate Debtor has also committed default in repayment of Loan Facility demanded by the banks and/or financial institution after invocation of personal guarantee,
d)That, in light of the above, it is just and equitable that insolvency resolution process be initiated against Mrs. Anuradha Sachdev, Personal Guarantor to the Corporate Debtor under the orders and directions of this Hon'ble Tribunal."
Despite the issuance of the notice, the Personal Guarantor/Respondent did not file any objection to the aforementioned report of RP. Thus, we do not find any reason or basis not to accept the report (ibid).
In view of the aforementioned, the present petition is admitted.
There is no request by the RP for the purpose of conducting a negotiation between the debtor and the creditors. As a sequel of admission of the present application, a moratorium shall commence in relation to all the debts of the Respondent, subject to the order to be passed by Hon'ble Supreme Court in W.P.C. No. 307/2022. The moratorium shall cease to have effect at the end of period of 180 days. The present order shall remain subject to the order to be passed by the Hon'ble Supreme Court in W.P.C. No. 307/2022. During the moratorium period – (a) Any pending legal action or proceedings in respect of any debt qua the Respondent shall be deemed to have been stayed; (b) the creditors shall not initiate any legal action or legal proceedings in respect of any debt qua the Respondent; (c) and the debtors shall not transfer, alienate, encumber or dispose of any of the assets or his legal right or beneficiary interest therein. A public notice shall be issued by the RP within seven days inviting claim from all creditors within 21 days of such notice which will remain subject to the outcome of the Writ Petition pending before Hon'ble Supreme Court. The notice shall include details of the present order, particulars of the Resolution Professional with whom the claims have to be registered and the last date for the submission of the claims. The notice shall be – (a) published in two newspapers, one in English and another one in Vernacular Language which are in circulation in the State where the debtor resides; (b) affixed in the premises of this Adjudicating Authority; and (c) placed on the website of the Adjudicating Authority. We are sanguine the RP shall discharge all such duties as are incumbent upon him in terms of the provisions of Sections 104, 105, 106, 107, 108, 112 and 113 of IBC, 2016, read with Regulations 5, 7, 8, 9, 11, 12, 13, 14, 15 and 17 of IBBI (Insolvency Resolution Process for Personal Guarantor to Corporate Debtors) Regulations, 2019 as also with due deference to the extent provisions of the aforementioned code/ regulations and/or any other provisions of law applicable to Insolvency Resolution qua Personal Guarantor. A copy of this order along with the copy of the application as also the report of Resolution Professional shall be provided to the Creditor (Applicant), Personal Guarantor (Respondent) and IBBI, by the Registry/Court Master within 7 days from today by email. It goes without saying that the entire process would remain subject to outcome of the challenge to Section 95 of IBC, 2016, pending before Hon'ble Supreme Court (supra).
To come up for consideration of status report to be filed by RP, within 12 weeks.