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Judgment
PER: HARNAM SINGH THAKUR, MEMBER (JUDICIAL)
The petition is filed by Tilak Raj Bedi (Personal Guarantor) under Section 94 of Insolvency and Bankruptcy Code, 2016 (hereinafter referred as code) read with Rule 6(1) 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 Personal Guarantors Insolvency Rules, 2019), seeking an order for initiation of the Insolvency Resolution Process (“IR Process”) against his/applicant who is the personal Guarantor to M/s. Puneet Fashions Private Limited (“Corporate Debtor/Principal Borrower”), who has extended personal guarantee to financial creditor namely, Indian Bank (Erstwhile Allahabad Bank) and other lenders. The corporate debtor had availed a loan of Rs. 120.00/- Crores from the Central Bank of India and to secure this debt Ms. Tilak Raj Bedi extended his personal guarantee in favour of the Indian Bank (Erstwhile Allahabad Bank). The said personal guarantee has been extended for the loan facilities availed by the corporate debtor.
The present application has been filed in the prescribed proforma. Moreover, the compliance affidavit pursuant to order dated 07.01.2022 has been incorporated vide Diary No. 1422/02 dated 15.03.2022, whereby applicant stating that in terms of provision of Section 94(4) of I & B Code, 2016 the applicant is not an undischarged bankrupt or not undergoing a fresh start process or not undergoing an insolvency resolution process or not undergoing a bankruptcy process. Also, in terms of the provisions of 94(5), no application has been admitted against the applicant during the period of 12 months preceding the date of submission of the present application under Section 94(1) of I&B Code, 2016.
On presentation of the application by the Applicant/Personal Guarantor, this Adjudicating Authority after getting the report about the antecedents of insolvency professional, appointed the Resolution Professional Mr. Pawan Sharma, Registration No. IBBI/IPA-002/IP-N00772/2019-2020/12463 Phone No. 9814304159 Email: [email protected] vide order dated 21.04.2022 under Section 97 of the Code. At the same time, limited notice of this petition to the creditor(s) for presence has been issued on 21.04.2022 by this Adjudicating Authority, pursuant to the said order compliance affidavit has been filed vide Diary No. 01422/04 dated 18.05.2022, whereby, the notice is served upon all the creditors via speed post. The original postal receipts and tracking report as obtained from India Post Website is attached as Annexure A-2 of the affidavit and some of the articles have been returned back and those have been submitted in the Registry vide Annexure A-3 of the affidavit. Subsequently, Ms. Vikas Chatharth Advocate appeared for respondent- Indian Bank (Erstwhile Allahabad Bank). It is to be noted that no objection/reply has been filed by the said respondent- Indian Bank (Erstwhile Allahabad Bank).
The Resolution Professional was directed to file the report under Section 99 of Insolvency and Bankruptcy Code, 2016 which has been filed by him through IA No. 428/2022 filed in CP (IB) No.1/Chd/Pb /2022 recommending the admission of the application filed under Section 94 of IBC, 2016. The grounds for admission of the application recorded in the report are as follows.
The Resolution Professional sought the following information, explanation and clarification.
a)The amount of default as claimed by the Creditor i.e., Indian Bank (Erstwhile Allahabad Bank)., is Rs. 248327681- (Rupees Twenty-Four Crore Eighty-Three Lacs Twenty-Seven Thousand Six Hundred Eighty-One only) as mentioned in the application bearing no. IB-01/CHD/PB/2022. Please confirm if any repayment of the debt has been made by you as claimed by the Financial Creditor. In case there is any repayment done by you, kindly provide us the evidence of electronic transfer of the unpaid amount from the bank account of the debtor.
b)The amount of default as claimed by the Creditor i.e., State Bank of India., is Rs. 113600287.97- (Rupees Eleven Crores Thirty-Six Lacs Two Hundred Eighty Seven and Ninety Seven Paisa only) as shown the Notice under Section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 the copy of the same was provide by the Application. Please confirm if any repayment of the debt has been made by you as claimed by the Financial Creditor. In case there is any repayment done by you, kindly provide us the evidence of electronic transfer of the unpaid amount from the bank account of the debtor.
c)List of Personal assets and liabilities as on date of the order i.e., 21.04.2022.
d)In case, if there any guaranteed deed that had been executed from your end to any other Company apart from Puneet Fashions Private Limited
e)The assets which are mortgage with the Creditors against the Guarantee, if any.
f)Apart from the above, following documents are also required.
•Income Tax returns along with its computation for last three Financial Years i.e., FY 2018-19, 2019-20 and 2020-21.
•Statement of affairs; for last three Financial Years i.e., FY 2018-19, 2019-20 and 2020-21.
•GST Returns: for last three Financial Years i.e., FY 2018-19, 2019-20 and 2020-21.
•Details of the Bank Account on your name and the bank statements of the said bank accounts for last one year.
In response to the above-mentioned information, explanation and clarification sought by Resolution Professional, the Personal Guarantor had given the following information:
a.a That the Personal Guarantor had not made any payment to any secured or unsecured creditor of the Corporate Debtor in his personal capacity. a.b That the Personal Guarantor had guaranteed the loans extended by the banks to Corporate Debtor. Further, the Personal Guarantor has informed the final list of Creditors which are Indian Bank (Erstwhile Allahabad Bank), Cheema chowk, Ludhiana. State Bank of India, Regional Office Civil Lines Ludhiana Madan Hosiery Mills, Kali Sadak, Ludhiana. Ludhiana Scripts Private limited 3B/1 Industrial Area A, Near Zoom hotel, Ludhiana. Raunaq Silk Mills, Ram Gali, Amritsar R S Knitters, Plot No. 417 Industrial Area A Nalin Tayal, 2B, Swami Vivek Anand Ashram Market Extension, B- Block Ludhiana Twerk Fashions, G. T. Road, Ludhiana Parmod Sharma (Shiva Tex), House No. 39 Industrial Area Ludhiana. M/s Sriyansh Knitters, Plot No. 380, industrial Area, Ludhiana Girish Kapoor (LWS), G. T. Road Near Chand Cinema, Ludhiana R.P. Processors. Plot No. 11 Industrial Area, Ludhiana. Custom & Excise Department, C-146 focal Point Phase V, Near Dry Port, Ludhiana. Custom & Excise Department, Air Cargo Export, new Custom House New Delhi-110037. Custom Excise and Service Tax Appellate Tribunal, Principal Bench, West Block No. 2 R.K. Puram New Delhi. Office of the Commissioner of Custom Special Investigation & Intelligence Branch. Office of Communication of Customs, Inland containers Depot Income Tax Department, New Delhi Directorate of Revenue Intelligence, Air Cargo (Airport) Tughlaqabad, New Delhi. Central Beaureu of Intelligence (CBI), New Delhi Director General of Foreign Trade. Enforcement Directorate, 556B, Cool Road, Jalandhar. Enforcement Directorate, Chandigarh.
Ram Iron, Industrial Area, Ludhiana Bittu Sharma, Industrial Area, Ludhiana Punjab State Power Corporation Limited, Ludhiana.
Vikas Singla, Industrial Area, Ludhiana Mr. Tilak Raj Bedi further informed that in Some properties are still lying with Indian Bank which are unsold as on date and the Guarantor further informed that for recovery of amount the bank has filed a case before Hon’ble DRT, Chandigarh which is sub-judice before RO of DRT Chandigarh.
In State bank of India Mr. Tilak Raj Bedi informed that he has given one agriculture property to the bank.
In Madan Hosiery Mills Mr. Tilak Raj Bedi informed the RP, earlier cheques were issued to them to secure their debt of the Corporate Debtor i.e. Puneet Fashions Private Limited which were signed by one of the Director and they have initiated recovery proceeding under section 138 of Negotiable Instrument Act, 1881 which is sub-judice before the District Court, Ludhiana.
He further informed that there was search proceeding conducted by the Income tax Department and they take records and books along with them and raised of various demand iii. In addition to the above, as asked by the Resolution Professional, Personal Guarantor had provided his Net Worth Certificate as on 21/04/2022. As per the said certificate, the net worth of the Personal Guarantor is Rs -197.82 Crores.
The Personal Guarantor had informed the Resolution Professional that he has not filed any income tax returns since financial year 2011-2012 and in not maintaining any bank account.
The Resolution Professional had sought additional information, explanation and clarification in connection with the Application from the creditors of the Corporate Debtor through email dated 29.08.2022 (page 14 to 16 of the present report). Since, the filing of present application no reply has been received by the applicant/Resolution Professional.
OBSERVATION AND RECOMMENDATION BY RESOLUTION PROFESSIONAL
In view of the above facts and circumstances, I, Pawan Sharma, the Resolution Professional appointed by this Hon’ble Tribunal, vide order dated 21.04.2022 in C.P. (IB) NO. 01/CHD/Pb/ 2022, hereby confirm that, I have perused/examined all the underlying documents and annexure and all the parameters are duly complied as per the provision of IBC and all the requisite & requirement under section 94 are duly met with, therefore, the Resolution Professional is of the considered opinion that the application filed by the applicant for initiation of Insolvency Resolution Process against Mr. Tilak Raj Bedi, Personal Guarantor to the Corporate Debtor M/s. Puneet Fashions Private Limited is in compliance with the provisions of the Code. Hence, the Resolution Professional considering the requirements of the admission of Personal Guarantee as stipulated in the Code recommends under section 99 (7) for approval of the application for initiation of Insolvency Resolution Process against Mr. Tilak Raj Bedi, Personal Guarantor to the Creditors of Puneet Fashions Private Limited on the following reasons:
a That the Application filed by Mr. Tilak Raj Bedi, through Resolution Professional Sh. Pawan Sharma (Resolution Professional) satisfies the requirement as set out in Section 94 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. The same is evident from the fact that an application was also filed by Indian Bank (Erstwhile Allahabad Bank) for initiating Liquidation against the Corporate Debtor before the Hon’ble Punjab and Haryana high Court which stood admitted vide order dated 11th November, 2016 and Hon’ble High Court appointed Liquidator.
c That Mr. Tilak Raj Bedi, 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. Further, the Personal Guarantor had informed that he had not made any payment to any secured or unsecured creditor of Puneet Fashions Private Limited in his personal capacity.
After perusal of the report submitted by Resolution Professional, there does not appear any request of the Resolution Professional for issuance of instruction for the purpose of conducting negotiations between the debtors and the creditors for arriving at the repayment plan. Therefore, based on the reasons recorded in the report submitted by the Resolution Professional, the application i.e. CP (IB) No.1/Chd/Pb /2022 filed under the provisions of Section 94 of IBC, 2016 is hereby admitted under Section 100 of the IBC, 2016. The Insolvency Resolution Process is initiated against the Applicant/Debtor and the moratorium is declared, which begins with the date of admission of the application and shall cease to have effect at the end of the period of 180 days, as provided under Section 101 of IBC, 2016. During the moratorium period,
Any pending legal action or proceeding 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; and
The debtor shall not transfer, alienate, encumber, or dispose of any of his assets or his legal rights or beneficial interest therein;
(d)The provisions of this section shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
The Resolution Professional, Mr. Pawan Sharma, who has been appointed under Section 97 vide order dated 21.04.2022, is directed to cause a public notice published on behalf of the Adjudicating Authority within 7 days of uploading of this order on the website of the NCLT, Chandigarh, inviting claims from all creditors, who shall register their claims as provided under Section 103 within 21 days of such issuance. The notice shall contain the necessary information as provided under Section 102(2) of IBC, 2016. The publication of notice shall be made in newspapers, one in English and other in Vernacular which have wide circulation in the state where the debtor resides. The Resolution Professional shall furnish two spare copies of the notice to the Registry. One shall be placed by the Registry on our website and the other shall be affixed in the premises of this Authority.
The Resolution Professional in exercise of the powers conferred under Section 104 shall prepare a list of creditors within 30 days from the date of the notice. The debtor shall prepare a repayment plan in consultation with the Resolution Professional as provided under Section 105 which shall include the provisions for payment of fee to the Resolution Professional. The Resolution Professional shall submit the repayment plan along with his report on the plan to this Authority within a period of 21 days from the last date of submission of claims, as provided under Section 106.
In case the Resolution Professional recommends that a meeting of the creditors is not required to be summoned, he shall record the reasons therefor. If the Resolution Professional is of the opinion that the meeting of the creditors should be summoned, he shall specify the details as provided under Section 106(3). The date of meeting should not be less than 14 days or more than 28 days from the date of submission of the report under Sub-Section (1) of Section 106, for which at least 14 days notice to the creditors(as per list prepared) shall be issued by all modes. Such notice must contain the details as provided under the provisions of Section 107.
The meeting of the creditors shall be conducted in accordance with Sections 108, 109, 110 and 111. The Resolution Professional shall prepare a report of the meeting of the creditors on repayment plan with all details as provided under Section 112 and submit the same to this Authority, copies of which shall be provided to the debtor and the creditors. It is made clear that the Resolution Professional shall perform his functions and duties in compliance with the code of conduct provided under Section 208 of the IBC, 2016.
In terms of the above, CP (IB) No.1/Chd/Pb /2022 filed under Section 94(1) of the IBC, 2016 is allowed & admitted. Consequently, the Insolvency Resolution Process stands initiated against the debtor/Personal Guarantor.