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2021 (6) TMI 533 - Tri - Insolvency and BankruptcyRequirement on the side of Adjudicating Authority to issue notice to the Personal Guarantor at the time of appointing RP - Section 95 of IBC, 2016 - HELD THAT:- The day the Application under Section 94 or 95 is filed, the "interim moratorium" gets triggered by virtue of Section 96(1)(a) of IBC, 2016 from the very date of such application. There is no separate provision available in the Code for this Adjudicating Authority to either impose or suspend the interim-moratorium, till the time the Application is actually admitted or rejected. From perusal of the contents of Section 96(1)(b) of IBC 2016, it is observed that the interim-moratorium only restrains any ongoing or fresh legal action or proceeding in respect of any debt pertaining to the Personal Guarantor. However, unlike the provision of "final moratorium" as stipulated under Section 101 (2)(c) of IBC 2016, which is initiated after the admission of the Application, there is no provision under interim-moratorium, which restrains Personal Guarantor from transfer, alienation, encumbering or disposing of any of the assets or his legal right or beneficial interest therein - thus, it it is clear that initiation of the interim-moratorium under Section 96 causes no prejudice to the Personal Guarantor. As it is evident from the provisions in Section 94 to 97 of IBC, 2016, the intention of legislature is not to make this Adjudicating Authority-a trial court at the time of appointing RP under Section 97. Rather, it is the RP, who once appointed, has been vested with the power to examine the documents provided by the Creditor or debtor, as the case may be, on merits - the provisions under Section 99 of IBC, 2016, are intended to protect the interest of Personal Guarantor by affording him an opportunity. By virtue of Section 99(2) of IBC, 2016, the Personal Guarantor is given an opportunity to prove before RP if the debt has already been discharged and the Personal Guarantor can furnish proof(s) or evidence to the RP regarding such payment of debt. Further, by virtue of the provision under Section 99(3), the Personal Guarantor is entitled to dispute the validity of such a debt except when the debt is registered with the information utility. Non-issuance of notice at the time of appointment of RP cannot be held to be a violation of the Principles of Natural Justice, since these cannot be rigid and their applicability depends on the demand of the law and situation. Further, there is no straight jacket formula applicable to the principles of natural justice, which can be followed in each and every case - thus, in the light of the material available on record and the admission made by the Ld. Counsel during hearing regarding receipt of the Demand Notice by E-mail, there is no mistake apparent on the face of record in the order dated 22.03.2021 passed by this Adjudicating Authority. Application dismissed.
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