Anita Goyal Vs Vistra ITCL (India) Ltd. & Anr (NCLAT Delhi)
Conclusion: Even in cases where the National Company Law Tribunal ( NCLT ) had not yet started or was in the process of liquidating a corporate debtor, an application under section 95 of the Insolvency and Bankruptcy Code (Code) against the personal guarantor might be maintained before the NCLT under section 60(1) of the code. The view that NCLT had no jurisdiction to entertain Section 95 Application filed by the Financial Creditor and the Application ought to have been filed before the DRT was not valid.
Held: Assessee appealed a decision made by the adjudicating body that granted an application under section 95 and instructed the RP to proceed under the law. He argued that section 97(3) of the law did not apply to the RP’s appointment. According to section 97(3), the adjudicating authority had to instruct the IBBI to designate the RP for the insolvency resolution procedure. NCLT should not consider an application to start an insolvency process against the personal guarantor. It was further contended that under section 60(1) of the Code, an insolvency application against the personal guarantor might be submitted to the NCLT even in the absence of any bankruptcy or liquidation proceedings against the corporate debtor. In contrast, the respondents argued that assessee could not make issues in the current appeal since they had not been brought before the adjudicating authority regarding the NCLT’s jurisdiction. Additionally, it was maintained that the RP chosen by the adjudicating authority was qualified and eligible, and that there were currently no disciplinary actions against the RP. It was held that applicability of section 60(1) of the code could not be ruled out which mean that the Adjudicating Authority for the purpose of entertaining the application against the personal guarantor should be the NCLT even if under section 60(2) of the code it was stated that when an insolvency or liquidation proceedings against the corporate debtor before the NCLT then application against the personal guarantor of the CD should also be filed before the NCLT. Tribunal noted that the aforementioned completely addressed the current situation, meaning that even in cases where the corporate debtor was not facing insolvency or liquidation proceedings before the NCLT, an application under section 95 might be made against the personal guarantor. From the above it was clear that with regard to maintainability of Application under Section 95 by a Financial Creditor against a Personal Guarantor, even if no insolvency resolution process or liquidation proceedings of a Corporate Debtor was pending, had been held to be maintainable and the view taken by this Appellate Tribunal in Mahendra Kumar Jajodia had also received the approval of the Hon’ble Supreme Court.
