NCLT initiates insolvency proceedings against a personal guarantor
NCLT initiates insolvency proceedings against a personal guarantor
The director was held responsible, as the company failed to repay the credit facilities
The Kolkata branch of the National Company Law Tribunal (NCLT) has initiated the Insolvency Resolution Process (IRP) against Vinod Kumar Mittal, the Personal Guarantor to the loan sanctioned to Gontermann-Pipers (India) Limited (GPIL) by UCO Bank.
The bench comprising of Rohit Kapoor (Judicial Member) and Harish Chander Suri (Technical Member) adjudicated a petition filed under Section 95 of the Insolvency and Bankruptcy Code (IBC), 2016. It appointed Partha Kamal Sen as the Resolution Professional.
The matter relates to GPIL, incorporated in 1966. It was a technical collaboration between H.K. Nathani of Kolkata (formerly Calcutta) and Gontermann-Peipers GmBH of Germany. While the latter was a leading European manufacturer of rolling mill rolls since 1825, GPIL was a leading manufacturer of iron and steel rolls in India and is presently undergoing liquidation proceedings.
Mittal is one of the directors of GPIL and had furnished a personal guarantee before the UCO Bank on the credit facilities availed by GPIL from the bank.
When GPIL failed to repay the credit facilities, the bank filed a petition under IBC before the NCLT seeking initiation of IRP against Mittal.
The Adjudicating Authority (AA) vide a 2021 order had appointed a Resolution Professional to file a report. The Resolution Professional filed it and recommended that the petition must be admitted based on the grounds:
· The Personal Guarantor committed default in payment of the monies to the Bank as agreed upon.
· The debts mentioned in the application are qualifying debts, and not excluded debts.
· The application is accompanied by details and documents as mentioned in Section 95(4).
· The Applicant Bank has provided a copy of the application to the Personal Guarantor.
· The application has been duly filed in the prescribed Form–C with the requisite fees – satisfied the requirement under Section 95(6).
· The Personal Guarantor is not eligible under Section 80 for a Fresh Start Process as provided under Part III Chapter II of IBC.
The AA observed that the Resolution Professional's report did not put forth any request for conducting negotiations between the debtor and the creditors for arriving at the repayment plan. Thus, the petition was admitted and Insolvency Process was initiated against the personal guarantor.
