Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2020 (9) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 340 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCHInitiation of insolvency resolution of a personal guarantor of the Corporate debtors - Financial Creditor - Contest against a Personal Guarantor of the Corporate Debtors - section 97(3) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- While an Application for corporate insolvency resolution process or liquidation proceedings of corporate debtors are pending before this Authority i.e. to say during the pendency of a process of corporate insolvency resolution of the Corporate Debtors, an Application against the Personal Guarantor shall have to be filed. This itself indicates that the process of corporate insolvency resolution of the Corporate Debtors in an Application relating to insolvency resolution etc. of a personal guarantor needs to be filed and can be prosecuted. The law doesn't envisage that the insolvency resolution of the personal guarantor should follow only when the process of corporate insolvency resolution of the corporate debtor has come to an end. Therefore, the submission that this Authority should wait till the resolution of RCOM or RITL is successfully accomplished and the debts of the corporate debtors have been satisfied, would be eristic. It is to be remembered that the present forum is not a recovery forum and has nothing to do with the satisfaction or otherwise of the debts of the corporate debtors. The submissions accordingly don't hold much water. Section 97(3) of the Code doesn't provide for any alternative or any option to the Adjudicating Authority to be tardy in making the direction to the Board. The use of the word 'shall' itself indicates the urgency with which the Application needs to be dealt with. The Authority accordingly has no other option than to issue the direction. The submissions made by the Respondents that this Authority could wait till the resolution of the Corporate debtors are completed accordingly cannot be accepted. Therefore, in our considered opinion we feel it appropriate to issue the direction in terms of Section 97(3) of the Code. Rule 8 of the I & B (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors) Rules, 2019 provides that for the purposes inter alia of sub section (2) of section 97 the IBBI may share the database of Insolvency Professionals and share a panel of Insolvency Professionals for the purpose inter alia of subsection (4) of section 97 of the Code. The IBBI has since shared the panel (valid till 25th November 2020) under its letter dated 25th June 2020 - Therefore, there is no need to direct the IBBI to nominate the name of a Resolution Professional. This Authority can appoint one from the panel. Since on filing of the Petition interim moratorium under section 96 of the Code had set in, no other order in terms of prayer (b) of the Application can be passed. Application disposed off.
|