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TMI Blog2023 (1) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT ASHOK BHUSHAN , J. This Appeal has been filed by the Appellant, a Guarantor of the Corporate Debtor, challenging the order dated 23.05.2022 passed by the National Company Law Tribunal, New Delhi Bench-II dismissing an Application filed by the Appellant under Section 94 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the "Code") relying on the report submitted by the Resolution Professional ("RP"). 2. Brief facts of the case necessary to be noted for deciding this Appeal are: (i) The Corporate Debtor - M/s. Gulati Retail India Ltd. had obtained financial facilities from Punjab & Sind Bank and ICICI Bank Ltd. The Appellant was one of the Personal Guarantor of the financial facilities extended by Punjab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port recommended rejection of the Application, Adjudicating Authority rejected the Application filed under Section 94 by the impugned order. The Adjudicating Authority took the view that Applicant has not produced any other document except the notice dated 04.10.2013 that guarantee has been invoked against the Applicant for recovery of the amount. 3. Shri Rajesh Bohra, learned Counsel for the Appellant challenging the order, submits that view taken by the Adjudicating Authority that guarantee has not been invoked against the Appellant is erroneous. Notice dated 04.10.2013 issued by the Bank under Section 13, sub-section (2) of the SARFAESI Act was addressed to all Personal Guarantors including the Appellant, hence the guarantee stood invok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reed to pay the rate of interest at the rate of 14.25 (Base Rate plus 4%) per cent per annum which monthly rests and as per guidelines of the bank from time to time, in respect of the above facilities. 3. That you addressee No.2 To 6 stood as guarantor(s) for addressee No.1 in consideration of the above said loan facilities and executed the deed of continuing guarantees on 27-04-2012 of addressee(s) No.2 to No.6 is co-extensive and continuing with addressee No.1 and you all are jointly and severally liable to pay the dues including interest, costs and other usual bank charges to the bank. 4. That you addressee NO 6 created equitable mortgage in respect of immovable property i.e. 250 P, Sector-21/B, Urban Estate, Faridabad Bearing to sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4). Provided that- (i) the requirement of classification of secured debt as non-performing asset under this sub-section shall not apply to a borrower who has raised funds through issue of debt securities; and (ii) in the event of default, the debenture trustee shall be entitled to enforce security interest in the same manner as provided under this section with such modifications as may be necessary and in accordance with the terms and conditions of security documents executed in favour of the debenture trustee." 8. The definition of 'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very of proceeds received from realization of mortgaged immovable property. Debtor has not submitted any notice for invocation of personal guarantee of Mr. Amanjyot Singh Gulati." 9. The learned Counsel for the Appellant may be right in his submission that by virtue of notice issued under Section 13, sub-section (2) dated 04.10.2013, the Appellant was also asked to make the payment of dues, but the undisputed fact is that apart from notice dated 04.10.2013, no steps have been taken by the Bank to recover any dues from the Appellant. The default, if any, committed by the Appellant was in October 2013, when notice was received by the Appellant. When we come to the order passed by the Adjudicating Authority, it is relevant to notice that in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been invoked, it is the Bank, who after invoking the guarantee shall proceed against the Appellant. 12. We, thus, are satisfied that foundation which was laid down by the Appellant for initiating the CIRP against the Appellant, was not sufficient to admit Section 94 Application and initiate the CIRP against the Appellant. We may further notice that Section 10 Application against the Corporate Debtor has already been admitted and CIRP against the Corporate Debtor had been initiated. The case taken up by the Bank being categorical and clear that no steps have been taken by the Bank against the Appellant, there is no cause for the Appellant to pray for initiation of CIRP against the Appellant - the Personal Guarantor. We, thus, do not fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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