TMI Blog2021 (6) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 'Applicant' or 'Petitioner') is a Non-Banking Financial Company engaged inter-alia in the business of providing financial facility. 3. M/s Eastern Overseas is a Partnership firm with Pan No. AADFE3101H (hereafter referred to as 'Borrower') is engaged in the business of Embroidery and similar activities and approached Intec for loan facilities originally along with M/s Eastern Embroidery Collections Private Limited (hereinafter referred to as 'Respondent' or 'Corporate Debtor') who furnished Corporate guarantee in the financial facility availed and stepped into shoes of borrower subsequently. 4. On 07.10.2013, Applicant was approached by Borrower through its Partners/representatives and submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e loan facilities of granting the financial facilities by the Financial Creditor, the borrower failed to maintain adequate amount in the bank account, as a result of which the cheques/ECS/ACH mandates were dishonoured by the banker and the payments were not made to the Applicant as per the repayment schedule. 9. The Applicant contends that the Applicant made repeated requests to the borrower, however, despite repeated requests, the borrower failed to regularize the loan account. Further, the borrower wrongfully withheld the legitimate monies owed to the Financial Creditor, thereby causing wrongful gain to itself and wrongful loss to the Applicant. The aforementioned acts of the borrower constituted 'events of defaults' as defined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 54,78,444/- in Loan A/c No. LNNHP00713-140003387 as on 31.10.2020, stands due and payable. The total amount dues is ₹ 2,10,57,036/- as on 31.10.2020. 13. We have heard the Ld. Counsel for the applicant on the point of issuance of notice upon the respondent and perused the averments made in the application. 14. Ld. Counsel for the applicant submitted that since the Corporate Debtor has failed to repay the loan, therefore, the present application is filed against the personal guarantor to initiate the CIRP against the personal guarantor. He further submitted that on the date of recall of loan the guarantee was also invoked. 15. Before making any comment on the submissions made on behalf of the applicant, at this juncture, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a personal guarantor. (4) In case of a joint application, the creditors may nominate one amongst themselves to act on behalf of all the creditors. 18. A bare perusal of Rule 7 shows that before filing an application under Section 95 of the IBC, a demand notice under clause (b) under Sub Section 4 of Section 95 of the IBC shall be served upon the guarantor demanding the payment of amount of default in Form B and the application under Sub Section 1 of Section 95 of IBC shall be submitted in Form C. 19. At this juncture, we would also like to refer Section 95 of the IBC 2016 and the same is quoted below:- Section 95-Application by creditor to initiate insolvency resolution process. (1) A creditor may apply either by him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accompanied by such fee as may be prescribed. (7) The details and documents required to be submitted under sub-section (4) shall be such as may be specified. 20. A bare perusal of the provision shows 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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