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TMI Blog2023 (11) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... e Limited Liability Partnership Act, 2008. The petitioner submits that by virtue of Ext.P3 Government Order dated 15.11.2019, the provisions under Sections 78, 79 and 94 to 187 of Insolvency and Bankruptcy Code, 2016 (IBC 2016) came into force with effect from 15.11.2019. In order to redress his grievances relating to the partnership, the petitioner initiated insolvency resolution process under Section 94 of the IBC 2016 before the adjudicating authority / National Company Law Tribunal, Kochi Bench. According to the petitioner, the NCLT has accepted Ext.P4 application submitted by the petitioner and has assigned Diary No.1386/2023 dated 23.08.2023 to the application. 3. The petitioner states that he initiated Ext.P4 insolvency proceedings as the 5th respondent-Bank resorted to coercive proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Bank filed Miscellaneous Case No.372/2023 on the files of the Chief Judicial Magistrate, invoking Section 14 of the Act, 2002. The petitioner would submit that along with Ext.P5 MC, the 6th respondent has not filed an affidavit in accordance with proviso to the Section 14(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or proceedings in respect of any debt shall also be deemed to have been stayed in view of Section 96(b) of the IBC 2016. 8. Standing Counsel representing the 4th respondent- Bank resisted the writ petition. On behalf of the Bank, the Standing Counsel submitted that the question of law raised by the petitioner has already been considered by the Hon'ble Apex Court in State Bank of India v. B. Ramakrishnan [2018 17 SCC 394]. The Apex Court has held that the question whether the moratorium mentioned in the IBC on admission of insolvency petition would apply to the personal guarantor of a corporate debtor and answered that the moratorium will not be extended to the personal guarantor of the corporate debtor. In the present case, the writ petitioner is the personal guarantor of the 3rd respondent-Corporate debtor. 9. The Standing Counsel further pointed out that the application stated to have been filed by the petitioner under Section 94 of the IBC 2016 has not been admitted by the NCLT. The application has not been assigned a regular case number by the Tribunal. Therefore, the petitioner cannot contend that there is a deemed moratorium even for the corporate debtor. The writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking to initiate Insolvency Resolution Process. 15. The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 has been enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interest. When the petitioner defaulted in repaying the financial advances made by the 1st respondent-Bank, the Bank has invoked the provisions of Sections 13 and 14 of the Act, 2002 and initiated recovery proceedings. It is thereafter the petitioner initiated Insolvency Resolution Process under Section 94 of the IBC 2016 before the National Company Law Tribunal, which is the adjudicating authority. Part III Chapter III of the IBC 2016 provides for Insolvency Resolution Process for individuals and partnership firms. The Government of India, Ministry of Corporate Affairs, as per Ext.P3 Notification dated 15.11.2019, appointed the 1st day of December, 2019 as the date on which Sections 94 to 187 of the IBC 2016 shall come into force. 16. Section 94 of the IBC 2016 reads as follows:- 94. Application by debtor to initiate insolvency resolution process - (1) A debtor who commits a default may apply, either persona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial sector regulator. Therefore, it is evident that when an application is filed under Section 94, an interim moratorium shall commence on the date of the application in respect to all the debts and shall cease to have effect on the date of admission of such application. 18. Once an application for Insolvency Resolution Process is admitted, Section 101 will come into play and a moratorium will commence in relation to all the debts and shall cease to have effect at the end of the period of 180 days beginning with the date of admission of the application or on the date the adjudicating authority passes an order on the repayment plan under Section 114, whichever is earlier. Section 101 provides that during the moratorium period, any pending legal action or proceeding in respect of any debt shall be deemed to have been stayed. 19. The argument of the petitioner is that the petitioner has filed Ext.P4 application invoking Section 94 of the IBC 2016 on 21.08.2023 and therefore as contemplated by Section 96(1)(b)(i), any legal action or proceeding pending in respect of any debt shall be deemed to have been stayed. As a consequence, the proceedings initiated by the 1st respondent-Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 96 by a debtor, on the creditors who will be disabled and disentitled from initiating or proceeding with any debt recovery legal mechanism, Section 96 should be construed strictly. Mere uploading of an application under Section 96 of the IBC 2016 cannot be taken as filing of an application. The filing of an application as contemplated under Section 96 should be defectless and devoid of any procedural lapses. Only when an application is filed without any defects and satisfying the statutory procedural requirements of filing and only when the adjudicating authority numbers the application, there can be a legal and acceptable filing of application. 26. In the case of the petitioner, admittedly the NCLT has not treated the application as a valid application by assigning regular case number to the application. As long as the petitioner's application is not duly numbered by the NCLT, the interim moratorium contemplated under Section 96(1)(b)(i) cannot come into operation. Therefore, the petitioner is not entitled to contend that the respondents cannot go ahead with the securitisation proceedings. 27. The argument of the petitioner that the IBC 2016 shall have overriding ef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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