Mahendra Kumar Jain v. STATE BANK OF INDIA

THE ADJUDICATING AUTHORITY NATIONAL COMPANY LAW

TRIBUNAL BENCH AT INDORE

CP (IB) No. 23 of 2022 Mahendra Kumar Jain

18-D, Maa Durga Nagar, Indore, Madhya Pradesh-452001. … Applicant / Personal Guarantor

Versus State Bank of India

1st Floor, SBI Building, Plot No. 1, Arera Hills, Bhopal, Madhya Pradesh-462011. … Respondent / Financial Creditor

C O R A M:

HON'BLE SH. MOHAN PRASAD TIWARI, MEMBER (J) HON'BLE SH. SANJEEV SHARMA, MEMBER (T)

APPEARANCE:

For the Applicant / PG : Mr. Nipun Singhvi, Advocate For the RP : Mr. Nilesh P. Udernani, Advocate For the Financial Creditor: Mr. Rohit Dubey, Advocate

Order Pronounced on: 28.08.2025

PER MOHAN P. TIWARI MEMBER, J.

1. The present Company Petition, CP (IB) No. 23 of 2022, has been filed by Mahendra Kumar Jain ("the Applicant/Personal Guarantor") on 10.12.2021, under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 ("IBC"/"the Code") read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules,

2

2019, seeking initiation of the Insolvency Resolution Process (IRP) against himself, being a Personal Guarantor to the Corporate Debtor, namely, M/s Indison Agro Foods Limited.

2. The Applicant is a Personal Guarantor in respect of the credit facilities sanctioned to the Corporate Debtor by a consortium of Banks led by the Respondent, State Bank of India. The nature of debt is term loan & working capital which includes the secured debt amounting to Rs.100 crore and unsecured debt amounting to Rs.117 crore.

3. Vide order dated 21.03.2024, this Bench appointed Mr. Hiten R. Abhani (IBBI/IPA-001/IP-P-02068/2020-2021/13231) as the Resolution Professional (RP) under Section 97(5) of the Code. The RP submitted his Report under Section 99 of the Code on 06.05.2024, recommending admission of the petition.

4. The Applicant admits that the debt in default is INR 2,19,06,84,216.87 (Rupees Two Hundred Nineteen Crores Six Lakh Eighty-Four Thousand Two Hundred Sixteen and Eighty-Seven Paise Only) as on 30.06.2017, with continuing interest and penalties thereafter. The record reflects that the account of the Corporate Debtor was classified as NPA on 28.10.2015, triggering default under Section 3(12) of the Code.

5. The loan was originally sanctioned in 2013 for INR 175 Crores, supported by consortium agreements, deeds of hypothecation, and personal guarantees, including that of the Applicant.

6. Despite issuance of notices under SARFAESI Act, 2002, and rejection of an OTS proposal dated 24.06.2019 (rejected on 14.08.2019), neither the Corporate Debtor nor the Personal Guarantors effected repayment.

7. The Respondent contends that the Petition is within limitation. The acknowledgment of debt in the OTS proposal dated 24.06.2019 extends limitation under Section 18 of the Limitation Act, 1963. Further, the Hon'ble Supreme Court In Re: Cognizance for Extension of

3

Limitation, Suo Motu Writ Petition (C) No. 3 of 2020 and MA No. 29 of 2022 excluded the period from 15.03.2020 to 28.02.2022 from limitation. Therefore, the present Petition filed on 16.07.2023 is within time.

8. Under Section 128 of the Indian Contract Act, 1872, the liability of a surety is co-extensive with that of the principal debtor, unless otherwise provided by contract. Thus, upon default by the Corporate Debtor, the Financial Creditor is entitled to proceed against the Personal Guarantor.

9. Under Section 94(1) of the IBC, a Personal Guarantor may file for initiation of Insolvency Resolution Process against himself. On filing of such an application, the Adjudicating Authority is required to examine completeness and admit or reject under Sections 100 and 101 of the Code.

10. We have carefully considered the submissions of the parties, the report of the RP, and the documents placed on record. The following findings emerge:

a- The debt of more than INR 219 Crores stands established. b- Default occurred on 28.10.2015 and continues till date. c- The Petition is complete and within limitation.

d- The RP has recommended admission under Section 99(7) of the Code.

11. Thus, we are satisfied that the conditions of Section 100(4) of the IBC are duly met and the Petition deserves admission.

12. Accordingly, in exercise of powers under Section 100 of the IBC, 2016, this Bench admits the present Petition, CP (IB) No. 23 of 2022, and directs as under:

I. The Insolvency Resolution Process against the Applicant / Personal Guarantor is hereby initiated.

4

II. In terms of Section 101 of the Code, a moratorium is declared, operative for a period of 180 days from today or until further orders, whichever is earlier, with the following consequences:

a. All pending or fresh legal actions in respect of any debt shall be stayed; b. No creditor shall initiate or continue legal proceedings in respect of any debt;

c. The debtor shall not transfer, alienate, encumber, or dispose of any assets or legal/beneficial interest therein;

d. Exceptions as notified by the Central Government in consultation with financial regulators shall apply.

III. Mr. Hiten R. Abhani, Resolution Professional (IBBI/IPA-001/IP- P-02068/2020-2021/13231), having office at A/502, Shilp Corporate Park, B/H Rajpath Club, Rajpath Rangoli Road, Ahmedabad, Gujarat- 380054, Email: habhani@gmail.com, is directed to issue a public notice within 7 days inviting claims from creditors as per Section 102 of the Code read with Rule 7 of the PG Rules.

IV. The publication of notice shall be made in two newspapers, one in English and other in Vernacular which have wide circulation in the State where the Corporate Debtor and Personal Guarantor resides. The Resolution Professional shall furnish two spare copies of the notice to the Registry for the record.

V. The Resolution Professional in the exercise of the powers conferred under Section 104 shall prepare a list of creditors on the basis of

a) the information disclosed in the application filed by the debtor under Sections 94 or 95. as the case may be, and

5

b) claims received by the Resolution Professional under Section 102 within 30 days from the date of the notice.

VI. The debtor shall prepare a repayment plan under Section 105, in consultation with the Resolution Professional, containing a proposal to the Creditors for restructuring of his debts or affairs.

VII. The repayment plan may authorize or require the Resolution Professional to:

a) carry on the debtor's business or trade on his behalf or in his name: or

b) realise the assets of the debtor; or

c) administer or dispose of any funds of the debtor. The repayment plan shall include the following, namely; -

a) justification for preparation of such repayment plan and reasons based on which the creditors may agree upon the plan;

b) provision for payment of fee to the Resolution Professional;

c) such other matters as may be specified.

VIII. The Resolution Professional shall submit the repayment plan along with his report on the plan to this Authority within a period of 21 days from the last date of submission of claims, as provided under Section 106.

IX. In case the Resolution Professional recommends that a meeting of the creditors is not required to be called, he shall record the reasons therefor. If the Resolution Professional is

6

of the opinion that a meeting of the creditors should be summoned, he shall specify the details as provided under Section 106(3) of IBC, 2016. The date of meeting should not be less than 14 day or more than 28 days from the date of submission of the Report under sub- section (1) of Section 106 of IBC, 2016, for which at least 14 days' notice to the creditors (as per the list prepared shall be issued by all modes. Such notice must contain the details as provided under the provisions of Section 107 of IBC, 2016.

X. The meeting of the creditors shall be conducted in accordance with Sections 108, 109, 110 & 111 of IBC, 2016. The Resolution Professional shall prepare a report of the meeting of the creditors on repayment plan with all details as provided under Section 112 of IBC, 2016 and submit the same to this Tribunal, copies of which shall be provided to the Debtor and the Creditors. It is made clear that the Resolution Professional shall perform his functions and duties in compliance with the Code of Conduct provided under Section 208 of IBC, 2016.

13. The Applicant is directed to deposit INR 50,000/- (Fifty thousand) to the bank account of the Resolution Professional within one week, towards his fees & out of pocket expenses. This shall be subject to the rules and regulations under the provisions of the Insolvency and Bankruptcy Code, 2016.

7

14. The RP shall submit progress reports every 30 days before this Bench.

15. The Registry is directed to communicate this order forthwith to the parties and the RP, and upload the same on the website of the NCLT within 7 working days.

16. Accordingly CP (IB) No. 23 of 2022 is admitted.

Sd/- Sd/- (Sanjeev Sharma) (Mohan Prasad Tiwari)

Member (Technical) Member (Judicial)

8