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2023 (4) TMI 266 - AT - Insolvency and BankruptcyInitiation of CIRP - Corporate Debtor failed to make repayment of its dues - Personal Guarantor - existence of debt and dispute or not - whether the applications filed by the Appellant under Section 95 of the I&B Code against the Personal Guarantors,Respondents was maintainable or not maintainable? - HELD THAT:- The I&B Code is founded on the premise that delay in the insolvency process shall diminish the value of the Corporate Debtor, hence, it should be done with fast speed to maximize the value and to protect the value of the Corporate Debtor. After noticing the above objective of the I&B Code, if the submission of learned counsel for the Respondent is accepted, that after commencement of the insolvency process if the value of Corporate Debtor reduced down, the whole process will go out of the jurisdiction of the Adjudicating Authority, the said submission runs contrary to the whole object and purpose of the I&B Code - The devaluation of assets of a Corporate Debtor by passing time is well accepted phenomena. The I&B Code, thus, provide for strict timeline to resolve insolvency with speed. To accept the submission that Corporate Debtor who is in red and further deteriorate by passing of time be taken out of insolvency process is to completely act against the statutory scheme. Since the asset size of JFIL became less than Rs.500 Crore as on 31.03.2021, the Adjudicating Authority shall lose jurisdiction to proceed further and this Tribunal shall also have no jurisdiction to proceed in the matter, cannot be accepted. Jurisdiction will be there with the Adjudicating Authority, as per Notification dated 18.11.2019, which has to exercise on the date when application can be filed against the Financial Service Provider for insolvency. As a corollary, an application under section 95 can be filed against the Personal Guarantor only when on the same date insolvency can be commenced against the Financial Service Provider. On the date when application was filed under Section 95 by the Financial Creditor against the Personal Guarantor an application could have filed against the Financial Service Provider on the basis of last Balance Sheet which had asset size of more than Rs.500, the application filed by the Financial Creditor against the Personal Guarantor was fully maintainable - the Adjudicating Authority has committed error in allowing the applications filed by the Personal Guarantors and dismissing the Company Petitions. Appeal allowed.
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