Mudraksh Investfin Pvt. Ltd. Vs Gursev Singh (NCLT Delhi)
NCLT Delhi held that the threshold limit for invoking the provisions of Section 95 of Insolvency and Bankruptcy Code, 2016 qua the Personal Guarantor to Corporate Debtor would be Rs. One Crore only. Thus, since amount defaulted is less than Rs. 1 Crore, the application dismissed.
Facts- The moot question arises to be determined here is whether in cases where the amount of default is less than 1 Crore, the Personal Guarantor can be treated as Insolvent and the application under Section 95 can be maintained against him.
Conclusion- Held that a conjoint reading of Rule 3(1)(a) of Insolvency and Bankruptcy (Application to Adjudication Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) 2019, Section 4 and Section 60(1) of the Code reveals that the threshold limit for invoking the provisions of Section 95 of IBC, 2016 qua the Personal Guarantor to Corporate Debtor would be Rs. One Crore only.
FULL TEXT OF THE NCLT JUDGMENT/ORDER
As can be seen from Part III of the application, apparently the amount of default is Rupees Ten Lakhs. The relevant excerpt of Part III of the application reads thus:
2. The moot question arises to be determined by us is, “whether in such cases where the amount of default is less than 1 Crore, the Personal Guarantor can be treated as Insolvent and the application under Section 95 can be maintained against him”. Mr. Mohapatra, the Ld. Coun-sel for the Applicant could draw our attention to Section 78 of IBC, 2016 and submitted that the threshold limit of default in respect of an individual under Part III of the Code is only Rs. One Thou-sand and thus, when in the present case the amount of default is more than Rs. Ten Lakhs, the ap-plication is maintainable and deserves to be admitted.
