AI Structured Summary
Not yet generated for this judgment
Judgment
ORDER
Per: Ashok Kumar Borah, Member (Judicial)
Since common issues and laws are involved in these applications, they have been taken up together and a common order is passed.
The Corporate Debtor is undergoing Corporate Insolvency Resolution Process pursuant to the order of this Tribunal dated 23.03.2021 in IBA / 22 / KOB / 2020 and IBA / 23 / KOB / 2020.
CP(IBC)/04/KOB/2022 and CP (IBC)/05/KOB/2022
The above Petitions have been filed by the Petitioner /Creditor State Bank of India under Section 95 (1) of the Insolvency and Bankruptcy Code, 2016( hereinafter referred to as ‘Code’) read with Rule 7(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019(hereinafter referred to as ‘Rules’) against Mrs.Reheena and Mr. Nazar. S, Personal Guarantors of the Corporate Debtor M/s. Nassco Trading India Private Limited (hereinafter referred to as ‘Corporate Debtor’), for initiating Insolvency Resolution Process.
The brief facts leading to the present petitions are as under: -
The State Bank of Travancore (SBT) initially granted credit facilities of Rs.2,00,00,000/- to the Corporate Debtor by way of a sanction letter dated 02.09.2011. At the request of the Corporate Debtor, the Credit facility was enhanced from time to time, and finally on 18.02.2016 cash credit facility was enhanced to 9.5 Crore and also granted an additional term loan of Rs. 1 Crore.
The Corporate Debtor has executed Term Loan Agreement, hypothecation agreement and also created equitable mortgage by deposit of title of the properties of the personal guarantors as security. The personal guarantors – Mrs Raheena and Mr. Nazar. S have executed a deed of guarantee/supplementary deed of guarantee dated 21.11.2011, 23.07.2012, 25.10.2013, 12.06.2014, 26.02.2015 and 18.02.2016 in favour of the creditor guaranteeing the repayment of all money payable by the Corporate Debtor to the creditor in respect of the above credit facilities together with interest thereon, and all costs and expenses in terms of the Loan Documents.
The State Bank of Travancore merged with State Bank of India (SBI) with effect from 01.04.2017, since then the account of the Corporate Debtor is maintained at SBI. Thereafter, in view of default committed by the Borrowers/ Corporate Debtor, the Loan Accounts of the Corporate Debtor became NPA on 28.08.2017. The Creditor has issued a Loan Recall notice on 16.01.2018 to the Borrowers and Guarantors, invoking the personal guarantees, directing them to discharge the then liability of Rs. 11,25,61,907.81/- within 7 days from the date of the said notice. However, the Corporate Debtor and personal guarantors failed to repay the outstanding liabilities.
The Creditor initiated proceedings under SARFAESI Act and a notice under Section 13(2) was issued on 03.04.2018 directing the Corporate Debtor and Personal Guarantors to repay the outstanding due of Rs.11,38,48,232.61 within 60 days.The Creditor has also filed OA No.49 of 2018 before the DRT on 03.02.2018 for the recovery of Rs.11,38,48,232.61 as on 20.12.2017 with future interest, costs, and charges against the Corporate Debtor and Personal Guarantors.
Regardless of granting sufficient opportunities, the Corporate Debtor and the Respondents/ Personal Guarantors failed to repay outstanding dues. Hence, the total outstanding as on 23.03.2021 under Loan Account Number 57060108229 is Rs. 12,80,02,003/-.
The learned counsel for the applicants argued that the Creditor had issued demand notices to both Guarantors on 22.11.2021. The demand notice was returned as "addressee left". Thereafter, notices were issued to the Respondents/ Guarantors in the last known address as per the loan documents and there is a deemed service of notice under Sec 27 of the General Clauses Act. Since the Respondents/Personal Guarantors did not make payment even after receiving the notice, the applicant has filed the present applications to initiate Corporate Insolvency Resolution Process against the guarantors under Section 95(1) of the Code read with Rule 7(2) of the Rules.
FINDINGS
We have heard the learned counsel for the applicants and have perused the whole case records including the documents appended thereto.
In this connection it is profitable to quote Section 95 of I&B Code, 2016:
“(1)A creditor may apply either by himself, or jointly with other creditors, or through a resolution professional to the Adjudicating Authority for initiating an insolvency resolution process under this section by submitting an application.
(2)A creditor may apply under sub-section (1) in relation to any partnership debt owed to him for initiating an insolvency resolution process against— (a) any one or more partners of the firm; or (b) the firm.
(3)Where an application has been made against one partner in a firm, any other application against another partner in the same firm shall be presented in or transferred to the Adjudicating Authority in which the first mentioned application is pending for adjudication and such Adjudicating Authority may give such directions for consolidating the proceedings under the applications as it thinks just.
(4)An application under sub-section (1) shall be accompanied with details and documents relating to— (a) the debts owed by the debtor to the creditor or creditors submitting the application for insolvency resolution process as on the date of application; (b) the failure by the debtor to pay the debt within a period of fourteen days of the service of the notice of demand; and (c) relevant evidence of such default or non-repayment of debt.
(5)The creditor shall also provide a copy of the application made under sub-section (1) to the debtor.
(6)The application referred to in sub-section (1) shall be in such form and manner and accompanied by such fee as may be prescribed.
(7)The details and documents required to be submitted under sub-section (4) shall be such as may be specified.”
In view of the above provision and that the applicants have complied with Section 95(4) quoted above, the notices issued have been sent to the Respondents/Personal Guarantors on 22.11.2021 and the Respondents/Personal Guarantors failed to make the payment, we have come to the conclusion that there is a default on the part of the Respondents/Personal Guarantors by not fulfilling the debts owed to the Corporate Debtor as per the clauses contained in the Consent Terms in respect of the outstanding financial debt which is apparent from the documents placed on record.
It is found that the applicants have filed these applications through an Insolvency Professional- Mr. Padmakumar.K.C. (Reg No.IBBI/IPA-001/IP-P01021/2017-2018/11671). But on a scrutiny of the list of Insolvency Professionals approved by the IBBI for Kochi Bench for the period 01.01.2022 to 31.06.2022, it is seen that the name of the aforesaid person is not available in the approved list for appointment as Resolution Professional. Therefore, the Registry sent a request along with the declaration filed by the IP to confirm whether any disciplinary action is pending against him to which the IBBI confirmed that as per records, there is nothing adverse against the proposed Insolvency Professional, Mr. Padmakumar.K.C.
Hence, this Tribunal ordered as under: -
I. These petitions filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 7(2) of the Insolvency and Bankruptcy Rules, 2019 by State Bank of India against Personal Guarantors of the Corporate Debtor Nassco Trading India Private Limited are ADMITTED with the following directions: -
II. The interim-moratorium under Section 96(1) (a) of the Insolvency and Bankruptcy Code, 2016 has commenced on the date of filing of these applications by the Creditor in relation to all the debts and will cease to have effect on the date of admission
III. During such interim-moratorium period-
any legal action or proceeding pending in respect of any debt shall be deemed to have been stayed; and
the creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt.
IV. This Tribunal appoints Mr. Padmakumar.K.C., an Insolvency Resolution Professional having Registration No: IBBI/IPA-001/IP-P01021/2017-2018/11671, residing at T.C.15/1997(3) Fair Dreams Women’s College North Gate,Thiruvananthapuram, Kerala,695014 and having email ID: [email protected] as the Resolution Professional, to carry out the functions as mentioned under the Insolvency and Bankruptcy Code, 2016. The fee payable to the Resolution Professional (RP) shall be in accordance with the Insolvency and Bankruptcy Board of India (IBBI) Regulations/ Circulars/ Directions issued in this regard.
V. That this Bench also directs that an advance payment of Rs.2,00,000 (Rupees Two Lakhs only) to be paid by the Petitioners/Creditors to the Resolution Professional (RP) immediately to initiate the process which shall be adjusted towards the fee and expenses payable to the Resolution Professional (RP). This amount cannot be considered as the fee paid to the RP.
VI. The Resolution Professional,shall exercise all the powers as enumerated under Section 99 of the Code read with Rules made thereunder. He is directed to make the recommendations with reasons in writing for acceptance or rejection of this Application within ten days from the date of receipt of this order, as envisaged under the provisions of Section 99 of the Code. The Resolution Professional shall provide a copy of the report under Sub-Section 7 of Section 99 to the Creditors as soon as the same is filed before this Adjudicating Authority.
VII. The Registry is directed to immediately communicate this order to the Creditors, Personal Guarantors, Corporate Debtor, and the Resolution Professional by way of an email. The Registry shall place a compliance report of this direction in this file.
VIII. List the above IBAs for report of Resolution Professional on 28.03.2022.