Case Title:- Ramesh Chander Agarwala V. State Bank of India & Anr.
The National Company Law Appellate Tribunal made certain observations in the instant appeal which had been filed u/s 61 of the Insolvency and Bankruptcy Code by 2 personal guarantors specifically challenging the appointment of a Resolution Professional(RP) without furnishing any limited notice to the Personal Guarantors in the Impugned Order dated 08.12.2021.
The Appellants were not only aggrieved by the appointment but were also aggrieved by the fact that the Resolution Professionals had been appointed without limited notice and also submitted a report u/s 99 to which they couldn’t file their objections.
The Appellants heavily relied upon Ravi Ajit Kulkarni v. State Bank of India wherein it had been specifically stated a limited notice had to be served to the personal guarantors before appointing a Resolution Professional to prepare its report and analysis. The Court stated that -
“In substance, once the application is "filed" (as per Section 95, 96 read with Rule 10) the Adjudicating Authority has to act on it, and following principles of natural justice, give limited notice to Personal Guarantor to appear referring to the Interim Moratorium that has commenced as per terms of Section 96. Then the next stage is of appointing Resolution Professional as per Section 97 read with Rules and Regulations. Third stage will be Resolution Professional acting in terms of Section 99 and submitting Report. At the fourth stage comes in adjudication of the application under Section 100 which ought to be decided by giving hearing to parties keeping in view Application, evidence collected and report under Section 99.”
Refuting the submissions of the Appellant, the counsel for the Respondents had submitted that in the instant case the Adjudicating Authority had not found any default errors unlike the situation in Ajit Kulkarni’s case. It was also brought to the notice of the Appellate Authority that the Appellants have already appeared before the Adjudicating Authority and they were granted time to the Personal Guarantors to submit Objections vide Order dated 16th March 2022.
The contentions of the Respondents were well taken by the Appellate Tribunal and it was noted that indeed, the Adjudicating Authority had granted the Appellants time to file their objections. However, in the interest of justice, the Appellant Personal Guarantors were given two weeks to file their objections. After considering this, the IRP may submit an additional report to the Adjudicating Authority for further proceedings.