In the matter of Ashu Jain & Ors.

National Company Law Tribunal30 August 2024

CitationCP (IB) No. 80 & 101-Chd-Pb-2024

Ratio decidendi

The rule this decision rests on

The interim moratorium under Section 96(1) of the Insolvency and Bankruptcy Code, 2016 commences on the date an application under Section 94 or Section 95 is filed, and during that period creditors of the debtor are barred from initiating any legal action or proceedings in respect of any debt. Where a personal insolvency application under Section 94 is filed and registered before an application under Section 95 against the same debtor, the earlier application proceeds, and the later application by the creditor, being barred by Section 96(1)(b)(ii) during the interim moratorium, is not maintainable and stands dismissed.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

THE NATIONAL COMPANY LAW TRIBUNALCHANDIGARH BENCH, COURT-I, CHANDIGARH(Exercising powers of Adjudicating Authority underthe Insolvency and Bankruptcy Code, 2016)(through web-based video conferencing platform)CP (IB) No. 80/Chd/Pb/2024&CP (IB) No. 101/Chd/Pb/2024Under Section 94 and 95 ofthe Insolvency andBankruptcy Code, 2016(Report under Section99-100, of IBC, 2016)IN THE MATTER OF CP (IB) No. 80/Chd/Pb/2024:Ashu Jainr/o H.No. 1658, Ground FloorSector-39, Chandigarh RoadWard No. 15, Guru Ram Das ColonyLudhiana- 141010Personal Guarantor of:Noble Steels Pvt. Ltd.AND IN THE MATTER OF CP (IB) No. 101/Chd/Pb/2024:Indian BankHaving its registered office at:254-260, Avvai Shanmugam SalaiRoyapettah, Chennai, 600014Tamil NaduAlso at:Stressed Assets Management (SAM) Branch165 Industrial Area-A, Near Cheema ChowkLudhiana- 141003Vs.Sh. Ashu JainR/o H.No. 1658, Ground FloorSector-39, Chandigarh RoadWard No. 15, Guru Ram Das ColonyLudhiana- 141010Section: 94 and 95 of the Insolvency and Bankruptcy Code, 2016CP(IB)No.80/Chd/Pb/2024andCP(IB)No.101/Chd/Pb/2024Judgment delivered on: 30.08.2024Coram: HON’BLE MR. HARNAM SINGH THAKUR, MEMBER (JUDICIAL)HON’BLE MR. RAHUL PRASAD BHATNAGAR, MEMBER (TECHNICAL)Present:For the Petitioner in : Mr. Vashisht, AdvocateCP (IB) No. 80/Chd/Pb/2024and Respondent inCP (IB) No. 101/Chd/Pb/2024For the RP in : Mr. Yash Shrivastav, AdvocateCP (IB) No. 80/Chd/Pb/2024For the Petitioner in : Mr. Abhishek Singla and Mr. AkshatCP (IB) No. 101/Chd/Hry/2024 Kalia, AdvocatesFor the RP in : Mr. Narsingh Chauhan, AdvocateCP (IB) No. 101/Chd/Pb/2024Per: Mr. Harnam Singh Thakur, Member (Judicial)Mr. Rahul Prasad Bhatnagar, Member (Technical)

JUDGMENT in CP (IB) No. 80/Chd/Pb/2024 and CP (IB) No. 101/Chd/Pb/2024 2. Both these applications, being interconnected, are taken up together for adjudication to determine which of these applications would proceed. 3. CP (IB) No. 80/Chd/Pb/2024 is filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code"), r/w Rule 6 (1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for IRP for Personal Guarantors to Corporate Debtor) Rules, 2019, seeking to set in motion the Insolvency Resolution Process (hereinafter referred as "IR Process") against the CP(IB)No.80/Chd/Pb/2024 andCP(IB)No.101/Chd/Pb/2024

Applicant/Debtor who is the Personal Guarantor of Noble Steels Pvt. Ltd. (hereinafter referred as "Corporate Debtor") for an amount of Rs. 10,78,86,816/- in relation to the credit facility extended by the Indian Bank (hereinafter referred to as “Financial Creditor”) in favour of the Corporate Debtor. 4. Whereas C.P. (IB) No. 101/Chd/Pb/2024 is filed by Indian Bank (“Financial Creditor”) against Ashu Jain (Personal Guarantor to Noble Steels Pvt. Ltd.) for an amount of Rs. 10,78,86,816/- in relation to the credit facility extended by the Indian Bank in favour of the Corporate Debtor 5. As per the Report of the Registry (attached), CP (IB) No. 80/Chd/Pb/2024 was registered on 05.04.2024, and was admitted vide order dated 08.04.2022, whereas CP (IB) No. 101/Chd/Pb/2024 was registered on 26.04.2024 and was admitted vide order dated 06.05.2024. In terms of Section 96 of the Code, an interim moratorium commences when an application is filed under Section 94 or 95 of the Code. Section 96 is reproduced hereunder for ready reference: 96. Interim-moratorium. - (1) When an application is filed under section 94 or section 95 : (a) an interim-moratorium shall commence on the date of the application in relation to all the debts and shall cease to have effect on the date of admission of such application; and (b) during the interim-moratorium period - (i) any legal action or proceeding pending in respect of any debt shall be deemed to have been stayed; and (ii) the creditors of the debtor shall not initiate any legal action or proceedings in respect of any debt.

CP(IB)No.80/Chd/Pb/2024 andCP(IB)No.101/Chd/Pb/2024 (2) Where the application has been made in relation to a firm, the interim moratorium under sub-section (1) shall operate against all the partners of the firm as on the date of the application. (3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. 6. Since the present application under Section 94 of the Code was registered and admitted prior in time to the application filed under Section 95 of the Code, therefore, the same shall be proceeded with. The application bearing CP (IB) No. 101/Chd/Pb/2024 by Indian Bank, the financial creditor, under the provisions of Section 95 of the IBC, 2016, is not maintainable, being barred under Section 96(1)(b)(ii) and thus stands dismissed accordingly. 7. In terms of the above, CP(IB) No. 80/Chd/Pb/2024 filed under Section 94 (1) of the IBC, 2016 shall further be listed on 05.09.2024 for further consideration.

-sd- -sd- (Rahul Prasad Bhatnagar) (Harnam Singh Thakur) Member (Technical) Member (Judicial) August 30, 2024 ASG

CP(IB)No.80/Chd/Pb/2024 andCP(IB)No.101/Chd/Pb/2024

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