Punjab National Bank Vs Mohita Indrayan (NCLT Chandigarh)
NCLT Chandigarh held that if an application is filed u/s. 94 by the Personal Guarantor himself and it appears that section 94 Application is mere a shield to avoid or dodge the insolvency process, the Personal Guarantor cannot be granted the benefit of an interim moratorium u/s. 96 of the Code.
Facts- The Applicant is a Personal Guarantor to M/s Indian Clothing League Private Limited (the Corporate Debtor) for the cash credit facilities to the tune of Rs. 20 crore and Rs. 15 crore from the Punjab National Bank and Allahabad Bank, respectively.
The Corporate Debtor defaulted in the repayments and the account of the Corporate Debtor was declared as a Non-Performing Asset (NPA) in March/May 2021. The creditors were, namely, Punjab National Bank, Indian Bank, and Shriram City Union Finance Limited. The total amount of debt in default is mentioned as Rs. 57.93 crore.
The Applicant filed a petition u/s. 94 of the Code on 01.09.2022 and as per Section 96(1)(a) of the Code, an Interim Moratorium commenced on the date of filing of the Section 94 petition in relation to all debts of the Applicant. Thereafter, Punjab National Bank and Indian Bank filed a separate Section 95 petition against the Applicant on 20.05.2023, i.e., after the interim moratorium had already commenced against the Applicant as on 01.09.2022 on account of the Section 94 petition filed by the Applicant. Thus, the Section 95 petition is pleaded to be dismissed, as it is barred u/s. 96(1)(b)(ii) of the Code.
