Insolvency resolution proceedings rightly initiated against NRI personal guarantor

Sudip Dutta @ Sudip Bijoy Dutta Vs State Bank of India (NCLAT)

Held that the provision under Section 60(1) makes it clear that the residence of Personal Guarantor is not taken into consideration when insolvency resolution proceedings against the Personal Guarantor are initiated.

Facts-

Proceedings initiated by State Bank of India u/s. 95 of I&B Code against the Appellant, who was the Personal Guarantor in the credit facilities extended to M/s Ess Dee Aluminum Ltd. (“Corporate Debtor”).

NCLT vide order dated 03.08.2021 had admitted the petition and appointed Mr. Prashant Jain as Resolution Professional, directing him to make recommendations for acceptance or rejection of the petition. Thereafter, the Resolution Professional filed its application u/s. 95(1) of the I&B Code recommending that insolvency process should be initiated against the Appellant. Accordingly, NCLT vide order dated 16.06.2022 had initiated insolvency resolution process against the Appellant. The Appellant filed appeals before the NCLAT challenging the orders dated 03.08.2021 and 16.06.2022.

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