In the matter of Indian Bank vs. Imran Khan,

IN THE NATIONAL COMPANY LAW TRIBUNAL DIVISION BENCH (COURT– I) CHENNAI ATTENDANCE CUM ORDER SHEET OF THE HEARING HELD ON 28.11.2024 THROUGH VIDEO CONFERENCING PRESENT: HON’BLE SHRI. SANJIV JAIN, MEMBER (JUDICIAL) HON’BLE SHRI. VENKATARAMAN SUBRAMANIAM, MEMBER (TECHNICAL) APPLICATION NUMBER : PETITION NUMBER : CP(IB)/169/CHE/2024 NAME OF THE PETITIONER(S) : Indian Bank NAME OF THE RESPONDENTS : G Imran Khan UNDER SECTION : Sec 95(1) of IBC, 2016 ORDER Present: Ld. Counsel Shri. C. Ramaiah for the Petitioner. None for the Respondent. Vide separate order pronounced in Open Court, Shri. Sambasivam Kannan is appointed as IRP to submit report under section 99 of IBC. List the petition for report / hearing on 03.01.2025.

Sd/- Sd/- (VENKATARAMAN SUBRAMANIAM) (SANJIV JAIN) MEMBER (TECHNICAL) MEMBER (JUDICIAL) MG

.IN THE NATIONAL COMPANY LAW TRIBUNAL, DIVISION BENCH – I, CHENNAI

CP(IB)/169/(CHE)/2024 (filed under Section 95(1) of the Insolvency and Bankruptcy Code, 2016)

Indian Bank, Stressed Assets Management Branch, Zonal Office Building No. 55, 2ND Floor, Ethiraj Salai, Egmore, Chennai-600 008 .....Applicant

-Vs- Mr Imran Khan S/o Gaffar Khan, No.1/24 C, Ranjith Road, Kotturpuram Chennai – 600 085 ....Personal Guarantor

Order pronounced on 28th November, 2024 CORAM : SANJIV JAIN, MEMBER (JUDICIAL) VENKATARAMAN SUBRAMANIAN, MEMBER (TECHNICAL)

For Applicant : C. Ramaiah, Advocate D Dinakar, Advocate For Respondent : None for the Respondent

(Hearing through Hybrid Mode) The Applicant, Indian Bank, Stressed Asset Management Branch,

Egmore, Chennai-600 008, has filed this application under Section 95(1) CP(IB)169(CHE)2024 Indian Bank, Stressed Assets Management Branch –Vs- M Imran Khan of the Insolvency and Bankruptcy Code, 2016 (“IBC”)for initiating

Insolvency Resolution Process against the Personal

Guarantor/Respondent Mr. Imran Khan of M/s. Eureka Automobiles

Pvt Ltd, the Corporate Debtor.

2. As per the averments made in the application, M/s. Eureka

Automobiles Pvt Ltd, had taken credit facilities from the Applicant.

The Respondent herein had given personal guarantee to the said loan.

The Corporate Debtor failed to repay the debt which made the Applicant to initiate Personal Insolvency Process against the Personal

Guarantor.

3. In Part-III of the application, the Applicant has given the particulars of debt as Rs.9,31,47,787.94/- (Rupees Nine Crores Thirty

One Lakhs Forty Seven Thousand Seven Hundred Eighty Seven and Paisa Ninety Four only), amount of default as Rs.9,31,47,787.94/- (Rupees Nine Crores Thirty One Lakhs Forty Seven Thousand Seven

Hundred Eighty Seven and Paisa Ninety Four only), and date of default as 31.01.2019.

CP(IB)169(CHE)2024 Indian Bank, Stressed Assets Management Branch –Vs- M Imran Khan

4. It is stated that O.A. No. 177/ 2022 has been filed before DRT

Chennai, which is within 3 years from the date of default.

5. The Applicant has placed the following documents:- i) Medium Term Loan Agreement dated 19.10.2016, entered into between the Applicant Company and the bank as Annexure I(5).

ii) Deed of hypothecation of movables dated 19.10.2016 as Annexure I(6)

iii) Demand Promissory Note dated 19.10.2016.

iv) Agreement of guarantee dated 19.10.2016 executed by the Corporate Debtor and the guarantors v) Agreement of Hypothecation of Movables dated 31.03.2018 as Annexure I(21).

vi) Form B Demand notice issued by applicant to guarantor dated 03.06.2022

6. The Demand Notice issued under Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency

Resolution Process for Personal Guarantors to Corporate Debtor)

CP(IB)169(CHE)2024 Indian Bank, Stressed Assets Management Branch –Vs- M Imran Khan

Rules, 2019 to the Personal Guarantor dated 03.06.2022 is also placed as Annexure I (24) at Page 141-143.

7. We have heard Learned Counsel for the Applicant.

8. Section 95 of IBC provides that a creditor may apply either by himself, or jointly with other creditors, or through a Resolution

Professional to the Adjudicating Authority for initiating an Insolvency

Resolution Process under the Section by submitting an application. The application shall be accompanied with details and documents relating to the debts or by the debtor to the creditor as on the date of application, failure by the debtor to pay the debt within a period of 14 days of the service of the Notice of Demand and the relevant evidence of such default or non-payment of debt. It also provides that “the creditor shall provide a copy of the application to the debtor and the application shall be in such form and manner.

9. The Hon’ble Supreme Court in the case “Mahendra Kumar

Jajiodia vs state bank of India” held that proceedings against personal guarantor of the corporate debtor under section 95 can be continued independently. Accordingly this application has been considered.

CP(IB)169(CHE)2024 Indian Bank, Stressed Assets Management Branch –Vs- M Imran Khan

10. Hon’ble Supreme Court in the matter of Dilip B Jiwrajka –Vs-

Union of India & Ors in Writ Petition (Civil) No 1281 of 2021 while dealing with the jurisdiction of NCLT in relation to adjudication of cases filed under Section 94 and 95 of IBC, 2016 has summarized in para-86 as follows;

86. We summarise the conclusion of this judgment below: (i) No judicial adjudication is involved at the stages envisaged in Sections 95 to Section 99 of the IBC; (ii) The resolution professional appointed under Section 97 serves a facilitative role of collating all the facts relevant to the examination of the application for the commencement of the insolvency resolution process which has been preferred under Section 94 or Section 95. The report to be submitted to the adjudicatory authority is recommendatory in nature on whether to accept or reject the application; (iii) The submission that a hearing should be conducted by the adjudicatory authority for the purpose of determining ‘jurisdictional facts’ at the stage when it appoints a resolution professional under Section 97(5) of the IBC is rejected. No such adjudicatory function is contemplated at that stage. To read in such a requirement at that stage would be to rewrite the statute which is impermissible in the exercise of judicial review;

(iv) The resolution professional may exercise the powers vested under Section 99(4) of the IBC for the purpose of examining the application for insolvency resolution and to seek information on matters relevant to the application in order to facilitate the submission of the report recommending the acceptance or rejection of the application;

(v) There is no violation of natural justice under Section 95 to Section 100 of the IBC as the debtor is not deprived of an CP(IB)169(CHE)2024 Indian Bank, Stressed Assets Management Branch –Vs- M Imran Khan opportunity to participate in the process of the examination of the application by the resolution professional;

(vi) No judicial determination takes place until the adjudicating authority decides under Section 100 whether to accept or reject the application. The report of the resolution professional is only recommendatory in nature and hence does not bind the adjudicatory authority when it exercises its jurisdiction under Section 100;

(vii) The adjudicatory authority must observe the principles of natural justice when it exercises jurisdiction under Section 100 for the purpose of determining whether to accept or reject the application;

(viii) The purpose of the interim-moratorium under Section 96 is to protect the debtor from further legal proceedings; and (ix) The provisions of Section 95 to Section 100 of the IBC are not unconstitutional as they do not violate Article 14 and Article 21 of the Constitution.

11. The Hon’ble Supreme Court has held that no judicial adjudication is involved at the stages envisaged in Sections 95 to Section 99 of the IBC and also there is no violation of natural justice under Section 95 to Section 100 of the IBC as the debtor is not deprived of an opportunity to participate in the process of the examination of the application by the resolution professional. The Respondent /

Personal Guarantor will be given an opportunity to file a reply once the RP has filed his Report under Section 99 of IBC, 2016.

CP(IB)169(CHE)2024 Indian Bank, Stressed Assets Management Branch –Vs- M Imran Khan

12. Considering the above facts and the case supra, we appoint the Resolution Professional who will collate all the facts relevant to the examination of the application for the commencement of the Insolvency Resolution Process in respect of the Personal Guarantor.

13. In the instant case, the Applicant has proposed the name of the Resolution Professional as “Mr. Sambasivam Kannan” IBBI/IPA-

001/IP-P00755/2017-2018/11287. We therefore, upon verification of disciplinary status and Authorisation for Assignment with the IBBI portal, appoint “Mr. Sambasivam Kannan” IBBI/IPA-001/IP-

P00755/2017-2018/11287 (Phone: 9381041949) (email id:- charitarthkannan@gmail.com) as Interim Resolution Professional in respect of the Personal Guarantor/Respondent.

14. The Resolution Professional is directed to examine the application as set out in Section 97(6) of IBC, 2016 who after examining, may recommend for the acceptance / rejection of the application as provided under Section 97(6) of IBC, 2016, within a period of 10 days as contemplated under Section 99(1) of IBC, 2016.

CP(IB)169(CHE)2024 Indian Bank, Stressed Assets Management Branch –Vs- M Imran Khan

15. The Applicant is directed to serve copy of the application and the order on the Interim Resolution Professional.

16. List this application for report / hearing on 03.01.2025 -Sd- -Sd-

VENKATARAMAN SUBRAMANIAM SANJIV JAIN Member (Technical) Member (Judicial)

KP

CP(IB)169(CHE)2024 Indian Bank, Stressed Assets Management Branch –Vs- M Imran Khan