TMI Blog2022 (3) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... or Rules, which requires that Form B notice shall be served upon the guarantor by Post/ Speed Post/ Courier or electronic form and where it cannot be served by any other mode it shall be affixed to outer door or some other conspicuous part of the house in which the addressee ordinary resides or carry out business. Section 95(5) requires the Creditor to provide copy of the application under sub-section (1) to the Debtor. This section needs to be read with Rule 3(1)(g) reproduced above. It is evident from reading the Section alongwith the Rule that what Creditor has to serve is copy of the application made under sub-section (1) to the Debtor. Reading Rule 7(2) with Rule 3 shows that the application filed under sub-section (1) of Section 95 shall be submitted in Form C and that the Creditor will serve forthwith a copy of the application to the Guarantor and the Corporate Debtor for whom the Guarantor is a Personal Guarantor. Thus, what has to be served is the copy of application which has been submitted - The procedure thus prescribed will give the Personal Guarantor notice of the application already filed before the Adjudicating Authority. Section 95(5) requires Creditor to provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... UBI, e-Andhra Bank and e-Corporate Bank with respect to revised credit facilities upto an aggregate of INR 18280.92 crores. iv. Third Supplemental Consortium Agreement dated June 20, 2013 was entered into between DHFL and a consortium of banks including UBI, e-Andhra Bank and e-Corporate Bank with respect to revised credit facilities upto an aggregate of INR 31,261 crores. v. Fourth Supplemental Consortium Agreement dated June 25, 2014 was entered into between DHFL and a consortium of banks including UBI, e-Andhra Bank and e-Corporate Bank with respect to revised credit facilities upto an aggregate of INR 35,044.48 crores. vi. Fifth Supplemental Consortium Agreement dated June 18, 2015 was entered into between DHFL and UBI with respect to revised credit facilities of up to INR 40,413.84 crores. a. The term loan credit facilities sanctioned by UBI under the Fifth Supplemental Consortium Agreement were to the extent of INR 1709.51 crores (outstanding as on April 06, 2015 was INR 1561.49 crores). b. Total term loan credit facilities sanctioned by e-Andhra Bank were to the tune of INR 750 Crores (outstanding as on April 06, 2015 was INR 650.89 crores), and the credit fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion made by RBI on 03.12.2019 and appointed the Administrator Mr. Subramaniyam Kumar. Pursuant to the public announcement on 04.12.2019, UBI submitted its claim to the Administrator. The claims of UBI submitted and admitted by Administrator is amounting to the tune of ₹ 35,17,30,39,020/-. The breakdown of the claim is as follows: Name of Bank Amount claimed in Form C (INR Crores) Amount admitted as on 10.09.2020 (INR Crores) Union Bank of India 23,78,04,77,454.70 23,51,05,05,929 e-Andhra Bank 6,88,96,84,338.92 6,76,32,42,970 e-Corporation Bank 5,78,55,25,804.20 4,89,92,90,121 Total 36,45,56,87,597.83 35,17,30,39,020 7. The total outstanding due of UBI under the credit facilities is INR ₹ 3,958,30,48,963.71/- and the personal guarantor is liable to pay the entire outstanding amount of ₹ 3,958,30,48,963.71/- as on 31.08.2020. the Petitioner invoked the deed of guarantee on 10.09.2020 ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent submitted that the demand notice was returned to the Petitioner by Mr. Kartik Wadhwan. Reply of the Respondent: 12. The Respondent stated that he is an erstwhile director of Diwan Housing Corporation Limited and that he has been in Judicial custody pending investigation since April 2020. The Respondent further claimed that the Petitioner failed to serve the demand notice under Form B on the Respondent herein and had claimed that the Petition may be dismissed at the outset. 13. The Respondent relied upon the Insolvency and Bankruptcy Rules which define the term Serve as follows: The Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 ( Personal Guarantor Rules ) define the serve under Rule 3 (g) as follows: (g) serve means sending any communication by any means, including registered post, speed post, courier or electronic form, which is capable of producing or generating an acknowledgment of receipt of such communication: Provided that where a document cannot be served in any of the modes, it shall be affixed at the outer door or some oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is confined in a prison, the summons shall be delivered or sent 4 [or by post or by such courier service as may be approved by the High Court, by fax message or by Electronic Mail service or by any other means as may be provided by the rules made by the High Court] to the officer in charge of the prison for service on the defendant. Order 5 CPC provides for issuance and service of summons and Rule 24 specifically prescribes a procedure for service of summons to the defendant who is in jail. Therefore, we ought to distinguish between issuance of demand notice and service of summons on the defendants who is in jail. 21. This Bench is of the prima facie opinion that intention of legislature for issuance/ service of Form B notice has to be read and it is seen that the Petitioner in strict compliance of Rule 7 r/w Rule 3 (h) has served Form B notice upon the Respondent at his address and the same was received by his son Mr. Kathik Wadhawan. This is a good service in terms of Rule 3 (h) of Personal Guarantor Rules, which requires that Form B notice shall be served upon the guarantor by Post/ Speed Post/ Courier or electronic form and where it cannot be served by any other mode i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 95(4), the application under Section 95(1) needs to be accompanied with details and documents relating to (a) the debts owed by the Debtor to the Creditor or Creditors submitting the application for insolvency resolution process as on the date of application; and (b) the details and documents relating to failure by the debtor to pay the debt within a period of 14 days of service of notice of demand. The notice of demand as per Rule 7(1) has to be in Form C (supra). The service of notice has to be effected as per Rule 3(1)(g). Service has been defined in the Rules as follows: (g) serve means sending any communication by any means, including registered post, speed post, courier or electronic means, which is capable of producing or generating an acknowledgement of receipt of such communication: Provided that where a document cannot be served in any of the modes, it shall be affixed at the outer door or some other conspicuous part of the house or building in which the addressee ordinarily resides or carries on business or personally works for gain. 23. Reverting again to Section 95(4), the application under sub-section (1) should be accompanied with details and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation Ltd v. P. Kesavan reported in (2004) 9 SCC 772, the Supreme Court has held as follows: 15. the maxim generalia specialibus non derogant meaning thereby, that general things do not derogate special things, shall, thus, apply in the instant case and in that view of the matter, as admittedly, the Appellant herein ahs expressed its desire to renew the lease, Sub-Section (2) of Section 5 read with Sub-Section (3) of Section 7 thereof shall be attracted. (3) in the case of Kunwar Pat Singh (Dead) by Lrs. V. State of U.P., reported in (2007) 5 SCC 85, the Supreme Court would make the following observations: 16. Section 6(2), on plain reading, deals with the various modes of publication and they are (a) publication in the Official Gazette, (b) publication in two daily newspapers circulating in the locality in which the land is situate of which at least one shall be in the regional language, and(c) causing public notice of the substance of such declaration to be given at convenient places in the said locality. There is no option left with anyone to give up or waive any mode and all such modes have to be strictly resorted to the principle is well settled that where an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent is untenable and set aside. 26. This Bench Allows the Application filed by Mr. Santanu T. Ray, Insolvency Resolution Professional, on behalf of the Union Bank of India, Financial Creditor, under Section 95 of the Insolvency Bankruptcy Code, 2016 read with Rule 7 of the IBC Rules 2019 against Mr. Dheeraj Wadhawan, the Personal Guarantor of the Corporate Debtor, K.K Welding Limited in CP No. 04 of 2021. 27. The Bench makes it clear that from the date of filing this Application, by the Petitioner, Interim Moratorium commences as stipulated under Section 96(1) of the Code in relation to all the debts of the Personal Guarantor. During the Interim Moratorium period: (i) any pending legal action or proceedings in respect of any debt shall be deemed to have been stayed; and (ii) the creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt. As per Section 96(3) of the Code, the provisions of sub- section 96(1) shall not apply to such transactions as may be notified by the Central Government, in consultation with any financial sector regulator. 28. The Bench notes that the appointment of Resolution Professional under Section 97 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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