Bank of Baroda vs Saurabh Rathi

P.S.N. Prasad, Member (Judicial)

This is an application filed by 'Bank of Baroda' under Section 95 of the Insolvency and Bankruptcy Code, 2016 through its Authorized Personnel Mr. Dinesh Kumar against Mr. Saurabh Rathi, Personal Guarantor to the Corporate Debtor, 'M/s RGTL Industries Ltd'. The Authorized Person has been appointed by the Financial Creditor, Bank of Baroda, to file the present Application under Section 95 of the Code seeking to initiate Insolvency resolution process against personal Guarantor of Corporate Debtor (M/s RGTL Industries Ltd) Mr. Saurabh Rathi in respect of the Outstanding debt of Rs. 20,10,27,358/- (Rupees Twenty Crore Ten Lakh Twenty-Seven Thousand Three Hundred and Fifty- Eight Only) as on insolvency commencement date of RGTL Industries Limited i.e., 10.04.2019 and further interest and charges until payment in full, is the amount in default and due from the Corporate Debtor under rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors), Rules, 2019.

That the Ld. Counsel for the Applicant submitted that the Corporate Debtor i.e., M/s RGTL Industries Ltd was admitted under Insolvency Resolution Process by NCLT, New Delhi on 10.04.2019

The Ld. Counsel for the applicant submitted that a Personal Guarantee by Mr. Saurabh Rathi, of the Corporate Debtor Company M/s RGTL Industries Ltd was given to Bank of Baroda. On 03.09.2020 when the applicant issued the demand notice under FORM-B and the respondent failed to make payments of the due amount, duly payable on part of RGTL Industries limited as per already agreed upon clause 20 of the Deed of Guarantee dated29.09.2015. As per respondent own admission, the demand notice was duly received by the respondent on 09.09.2020. Further as per clause 8 of the deed of guarantee dated 29.09.2015 the guarantee which was provided by the respondent in respect of the amounts advanced by the applicant to RGTL Industries Limited was of continuing in nature, according to section 130 of Indian Contract Act, 1872 the applicant declares that no revocation of the continuing guarantee has been received by the applicant from the respondent till the present filing of this application and therefore the respondents guarantee provided for amounts advanced by the applicant to RGTL Industries Limited is still continuing and the respondent is still liable for the due amount.

The Ld. Counsel for the applicant further submitted that a Demand Notice in Form B under rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtor) Rules, 2019 was issued by the Financial Creditor, i.e., Bank of Baroda on 03.09.2020 to the Personal Guarantor in respect of the unpaid debt due from M/s. RGTL Industries Ltd. (Corporate Debtor) under rule 7(1) of the IBC, 2016. Further, the Applicant has satisfactorily produced proof of evidence that the said notice was delivered to the Personal Guarantors along with computation of the amount of default and other particulars. The proof of delivery has been annexed by the applicant. The Ld. Counsel for the Applicant mention that there has been reply from the respondent to demand notice on 22.09.2020 to Form-B.

The applicant in Part- III of Form-C has submitted that the Record of Default by Information Utility recording of debt committed by the Corporate Debtor M/s RGTL Industries Ltd. has also been annexed with the application.

That the Applicant in Part IV of the Form-C has proposed the name of Mr. Anil Matta, having registration number IBBI/IPA-001/IP-P00223/2017-18/10422 have been proposed by the Bank of Baroda to act as the Resolution Professional in the Insolvency Resolution process of Mr. Saurabh Rathi.

It is pertinent to mention that as per part- III of Form-C, the total debt from the personal Guarantor by way of personal Guarantee given to M/s RGTL Industries Ltd., including the rate of interest amount to Rs. 20,10,27,358 (Rupees Twenty Crore Ten Lakh Twenty-Seven Thousand Three Hundred and Fifty-Eight Only).

This Tribunal heard the arguments advanced by the Ld. counsel for the Applicant and perused the averments

made in the application as well as the documents enclosed with the application. Further, the Respondent has filed its reply and it's been annexed with the petition and on the date of hearing there was no representation from the side of the Respondent i.e., the Personal Guarantor.

That based on the documents produced and placed on record before this Tribunal and on the submissions made by the Applicant it can be concluded that there is a 'default' on the part of the Personal Guarantor by not fulfilling the debt owed to the Corporate Debtor, i.e., RGTL Industries Ltd.

This Tribunal "Allows" the Present Application filed by Mr. Dinesh Kumar, Authorized Person on behalf of Bank of Baroda, the Financial Creditor, under Section 95 of the Insolvency & Bankruptcy Code, 2016 read with Rule 7 of the IBC Rules 2019 against Mr. Saurabh Rathi, the Personal Guarantor of the Corporate Debtor, (M/s. RGTL Industries Ltd). The Interim Moratorium as per Section 96(1) of the Code has commenced from the date of filing of Application by the Financial Creditor, i.e., 01.09.2021

The Tribunal makes it clear that from the date of filing this Application i.e., 01.09.2021 by the Applicant, 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.

Since, the appointment of Resolution Professional under Section 97 of the Code is critical and essential not only for the Applicant but also to safeguard the assets of the Personal Guarantor in terms of the provisions of the Code, hence, in Part- IV of the present application, Resolution Professional Proposed, Mr. Anil Matta, bearing Registration No. IBBI/IPA-001/IP-P00223/2017- 18/10422, is being confirmed by this bench for appointment as the proposed Resolution Professional in the matter.

In this matter, the Resolution Professional, Mr. Anil Matta, shall exercise all the powers as enumerated under Section 99 of the Code read with Rules made there under. He is directed to make the recommendations, with reasons in writing, for acceptance or rejection of this Application within the stipulated time as envisaged under the provisions of Section 99 of the Code. The Resolution Professional shall provide a copy of the report under sub¬section 7 of Section 99 to the Creditor as soon as the same is filed before this Authority.

List the matter for further proceedings in the case on 08th November 2021.