IN THE NATIONAL COMPANY LAW TRIBUNAL
KOLKATA BENCH (Court-II)
KOLKATA
IA(I.B.C)/890(KB)2024
IN
C.P. (IB)/256(KB)2023
An application under Section 99 (1) Insolvency and Bankruptcy Code, 2016
In the matter of:
State Bank of India
…Financial Creditor
Versus
Sudesh Sonthalia
…Personal Guarantor
And
Daulat Resolution Services Private Limited
…Resolution Professional
Date of pronouncement: 24.06.2024
CORAM:
SMT. BIDISHA BANERJEE, HON’BLE MEMBER (JUDICIAL)
SHRI D. ARVIND, HON’BLE MEMBER (TECHNICAL)
Appearance (via video conferencing/physically)
Mr. Riyanshu Agarwal, Adv. ] For the Resolution Professional
Mr. Snehasish Chakraborty, Adv. ]
Ms. Tripti Agarwal, RP ] RP-in-person
Ms. Aparajita Rao, Adv. ] For the SBI
Ms. Swastika Roy, Adv. ]
ORDER
IN THE NATIONAL COMPANY LAW TRIBUNAL
KOLKATA BENCH (Court-II)
KOLKATA
IA(I.B.C)/890(KB)2024
IN
C.P. (IB)/256(KB)2023
Per: D. Arvind, Member (Technical)
1. The Court Convened in a hybrid mode.
2. This I.A.(IB)No.890/KB/2024 in C.P.(IB)/256(KB)2023 has been
preferred by the Financial Creditor to seek initiation of Insolvency
Regulation Process against the Respondent Personal Guarantor to
Corporate Debtor Rule, 2019 (“Personal Guarantors Rules”) and
Regulation 4(2) of IBBI (Insolvency Resolution Process for Personal
Guarantors to Corporate Debtors) Regulations, 2019 (‘Personal
Guarantors Regulations’) in terms of Section 99 (1) of the Insolvency
and Bankruptcy Code, 2016 read with applicable Regulation of the
Insolvency and Bankruptcy Board of India (Insolvency Resolution
Process for Personal Guarantors to Corporate Debtors), 2016.
3. The amount in default is Rs.97.28 Crores as on 03.05.2021 plus
future interest and charges.
4. The application is complete as required under Section 95 read with
Rule 7 of the Insolvency and Bankruptcy (Application to
Adjudicating Authority for Insolvency Resolution Process for
Personal Guarantors to Corporate Debtor) Rules, 2019.
5. It is to be noted that Hon’ble Supreme Court in the judgment of Dilip
B. Jiwrajka vs. Union of Ind ia & Ors. In WP (Civil) No. 1281 of
2021 dated 09.11.2023 has upheld the Constitutional Validity of the
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IN THE NATIONAL COMPANY LAW TRIBUNAL
KOLKATA BENCH (Court-II)
KOLKATA
IA(I.B.C)/890(KB)2024
IN
C.P. (IB)/256(KB)2023
Sections 94 to 100 and the propositions that can be culled out from
the Judgments inter-alia are as follows:
“i. No judicial adjudication is involved at the stages
envisaged in Sections 95 to Section 99 of the IBC;
ii. The Resolution Professional appointed under Section
97 serves a facilitative role of collating all the facts
relevant to the examination of the application for the
commencement of the insolvency resolution process
which has been preferred under Section 94 or
Section 95. The report to be submitted to the
adjudicatory authority is recommendatory in nature
on whether to accept or reject the application;
iii. No adjudicatory function of Adjudicating Authority is
contemplated at the admission stage. To read in
such a requirement at that stage would be to rewrite
the statue which is impermissible in the exercise of
judicial review;
iv. The resolution professional may exercise the powers
vested under Section 99(4) of the IBC for the purpose
of examining the application for insolvency resolution
and CP/IB/337/AHM/2020 12 of 17 to seek
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IN THE NATIONAL COMPANY LAW TRIBUNAL
KOLKATA BENCH (Court-II)
KOLKATA
IA(I.B.C)/890(KB)2024
IN
C.P. (IB)/256(KB)2023
information on matters relevant to the application in
order to facilitate the submission of the report
recommending the acceptance or rejection of the
application;
v. There is no violation of natural justice under Section
95 to Section 100 of the IBC as the debtor is not
deprived of an opportunity to participate in the
process of the examination of the application by the
resolution professional;
vi. No judicial determination takes place until the
adjudicating authority decides under Section 100
whether to accept or reject the application. The report
of the resolution professional is only
recommendatory in nature and hence does not bind
the adjudicatory authority when it exercises its
jurisdiction under Section 100;
vii. The adjudicatory authority must observe the
principles of natural justice when it exercises
jurisdiction under Section 100 to determine whether
to accept or reject the application;
CP/IB/337/AHM/2020 13 of 17
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IN THE NATIONAL COMPANY LAW TRIBUNAL
KOLKATA BENCH (Court-II)
KOLKATA
IA(I.B.C)/890(KB)2024
IN
C.P. (IB)/256(KB)2023
viii. The purpose of the interim moratorium under Section
96 is to protect the debtor from further legal
proceedings; and
ix. The provisions of Section 95 to Section 100 of the IBC
are not unconstitutional as they do not violate Article
14 and A.”
6. The Applicant had proposed the name of the Insolvency Professional
for appointment as Resolution Professional. In view of the above,
Daulat Resolution Services Private Limited, IBBI Registration No.
IBBI/IPE-0156/IPA-1/2023-24/50062, email ID:
Professional, subject to his possessing a valid AFA, in exercise of the
power conferred under Section 97 of the IBC, 2016 on this Authority.
7. The Resolution Professional was directed to file declaration within
seven days to the effect that he fulfils all the requirements for being
appointed as Resolution Professional in the matter which he has
given, and to file his report in terms of Section 97 in two weeks.
8. The Resolution Professional Daulat Resolution Services Private Limted
has vide his report dated 30th April, 2024 has recommended
admission of the personal guarantor in to the Insolvency resolution
process. The relevant portion of his report has been extracted and
appended below for the sake of convenience.
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IN THE NATIONAL COMPANY LAW TRIBUNAL
KOLKATA BENCH (Court-II)
KOLKATA
IA(I.B.C)/890(KB)2024
IN
C.P. (IB)/256(KB)2023
“In view of the above and the fact that the application filed by the Creditor
complies with the requirement of Section 95 and the debtor has not made
repayment of the debt as per documents available, the undersigned RP
hereby recommend to admit the application under Section 100 of the IBC”
9. The Personal Guarantor has neither entered appearance despite
repeated opportunities and has nor refuted the statements in the
report of Resolution Professional.
10. We have considered the report and perused the details of claim
indicated therein.
11. We are satisfied with the recommendation of the Resolution
professional to admit the application.
12. In absence of any dispute or controversion by the Personal
Guarantor, this application is admitted with the following directions:
13. Hence, we pass the following order:
(1) This application is admitted under Section 100;
(2) In terms of Section 101 :
A moratorium shall commence in relation to all the debts and
shall cease to have effect at the end of the period of one hundred
and eighty days beginning with the date of admission of the
application or on the date this Adjudicating Authority passes an
order on the repayment plan under section 114, whichever is
earlier.
(3) During the moratorium period—
(a) any pending legal action or proceeding in respect of any debt shall
be deemed to have been stayed;
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IN THE NATIONAL COMPANY LAW TRIBUNAL
KOLKATA BENCH (Court-II)
KOLKATA
IA(I.B.C)/890(KB)2024
IN
C.P. (IB)/256(KB)2023
(b) the creditors shall not initiate any legal action or legal proceedings
in respect of any debt; and
(c) the debtor shall not transfer, alienate, encumber or dispose of any
of his assets or his legal rights or beneficial interest therein;
(4) In relation to a firm, the moratorium under sub-section (1) shall
operate against all the partners of the firm.
(5) The provisions of this section shall not apply to such transactions as
may be notified by the Central Government in consultation with any
financial sector regulator.
(6) In absence of any prayers from any quarters against the nominated
Resolution Professional, the IRP will act as the Resolution Professional
(RP in short).
(7) The said RP shall act in terms of Section 102, 103, 104 of the Code, to
cause public notice, invite claims from creditors, prepare list of
creditors, and hold regular meeting as directed hereunder:
(i) In terms of Section102:
The Resolution Professional shall cause a public notice within
seven days of passing the order under section 100 inviting claims
from all creditors within twenty-one days of such issue.
(ii) The notice under sub-section (1) shall include—
(a) details of the order admitting the application;
(b) particulars of the resolution professional with whom the claims
are to be registered; and
(c) the last date for submission of claims.
(3) The notice shall be—
(a) published in at least one English and one vernacular
newspaper which is in circulation in the state where the debtor
resides;
(b) placed on the website of the Adjudicating Authority.
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IN THE NATIONAL COMPANY LAW TRIBUNAL
KOLKATA BENCH (Court-II)
KOLKATA
IA(I.B.C)/890(KB)2024
IN
C.P. (IB)/256(KB)2023
(iii) In terms of Section 103:
(1) The creditors shall register claims with the resolution
professional by sending details of the claims by way of electronic
communications or through courier, speed post or registered
letter.
(2) In addition to the claims referred to in sub-section (1), the
creditor shall provide to the resolution professional, personal
information and such particulars as may be prescribed.
(iv) In terms of Section104:
The resolution professional shall, within 30 days from the date of
notice prepare a list of creditors on the basis of—
(a) the information disclosed in the application filed by the debtor
under section 94 or 95, as the case may be; and,
(b) claims received by the resolution professional under section
102.
(v) In terms of Section 105:
The Resolution Professional shall assist the debtor in preparing
repayment plan containing a proposal to the creditors for
restricting of his debts or affairs.
(vi) In terms of Section 106:
The Resolution Professional shall submit the repayment plan
under Section 105 along with his report, within 21 days from the
last date of submission of claims under Section 102 specifying.
(a) That the repayment plan is in compliance with the provisions of
any law for the time being in force;
(b) That the repayment plan has a reasonable prospect of being
approved and implemented; and
(c) Whether there is a necessity of summoning a meeting of the
creditors, if required, to consider the repayment plan:
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IN THE NATIONAL COMPANY LAW TRIBUNAL
KOLKATA BENCH (Court-II)
KOLKATA
IA(I.B.C)/890(KB)2024
IN
C.P. (IB)/256(KB)2023
(vii) Meeting of creditors shall be held if necessary, specifying the
(a) Date, Time and Place of meeting after consulting the
creditors;
(b) Within 14 to 28 days from submission of its report;
(c) After issuance notice for meeting at least 14 days in advance,
to all the creditors mentioned in the list of creditors.
(viii) The Resolution Professional will act in accordance with
Sections 107, 108, 109 and 110 to summon creditors,
conduct meeting of creditors, allow them voting rights in
accordance with voting share assigned to each, and seek
approval of repayment plan if any.
(ix) The Resolution Professional shall prepare a report of the
meeting in accordance with Section 112 and furnish a report
to this Adjudicating Authority.
14. Report under Section 99(1) is taken on record.
15. As Company Petition No. 256 of 2023 stands admitted.
IA(I.B.C)890(KB)/2024 is disposed of.
16. Next date for consideration would be 12.08.2024.
D. Arvind Bidisha Banerjee
Member (Technical) Member (Judicial)
Singed on this, the 24th June, 2024.
SG, Steno
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