Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2021 (6) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (6) TMI 392 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - personal guarantor to a corporate debtor - invocation of Guarantee - Demand notice was not served upon the personal guarantor before application filed for CIRP - existence of debt and dispute or not - HELD THAT:- An application by the creditor against the personal guarantor shall be filed under Section 95 (1) of the IBC and according to Section 95(4) IBC 2016 (i) an application under sub-section (1) shall be accompanied with details and documents relating to the debts owed by the debtor to the creditor or creditors submitting the application for insolvency resolution process as on the date of application, (ii) it shall only be filed on failure by the debtor to pay the debt within a period of fourteen days of the service of the notice of demand and (iii) supported with relevant evidence of such default or non-repayment of debt - On co-joint reading of Section 95 of IBC with Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, made it clear, an application under Section 95 shall only be filed, on failure of debtor to pay the debt within the period of 14 days of service of the demand notice, served u/s. 95(4) IBC 2016. which means an application u/s. 95(1) IBC 2016 can only be filed after the expiry of period 14 days from the date of service of demand notice under Section 95(4)(b) of the IBC. The applicant/creditor has filed under Section 7 of the IBC not under Section 95 of IBC. Secondly, the applicant has filed the application for initiation of CIRP not against the Corporate Debtor rather against the personal guarantor. Therefore, the applicant is required to submit an application in Form C under Section 95(1) of the IBC and that too after service of demand notice as required under Section 95(4)(b) read with Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 and if the debt is not paid within 14 days from the date of service of demand notice.
|