In the matter of UCO Bank vs. Shankar Poddar,

IN THE NATIONAL COMPANY LAW TRIBUNAL DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 An application in terms of Section 112 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 19 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulation, 2019 read with Rule 11 of the National Company Law Tribunal Rules, 2016. IN THE MATTER OF: UCO BANK … Financial Creditor. Versus SHANKAR PODDAR … Personal Guarantor to the Corporate Debtor. And IN THE MATTER OF: RACHANA AGARWAL … Resolution Professional (RP)/Applicant. Date of Pronouncement: February 19, 2025. CORAM: SMT. BIDISHA BANERJEE, HON’BLE MEMBER (JUDICIAL) SMT. MADHU SINHA, HON’BLE MEMBER (TECHNICAL) APPEARANCES: For RP: Mr. Dripto Majumdar, Adv. Ms. Ankita Upadhyay, Adv. Ms. Rachna Agarwal (RP in Person) Table of Contents A. Initiation of Insolvency Resolution Proceedings in respect of the Personal Guarantor: ............................................ 3 B. Public Announcement and Collation of Claims: ............... 3 C. Preparation of Repayment Plan: ....................................... 5 D. Evolution and Voting: ........................................................ 5 E. Insolvency Resolution Process Compliances: ................... 8 F. Our Inference: .................................................................. 10

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 ORDER Per: Bidisha Banerjee, Member (Judicial) 1. The Court congregated through a hybrid mode.

2. We have heard the Learned Counsel Mr. Dripto Majumdar appearing on behalf of the Resolution Professional.

3. This application has been preferred under Section 112 of the Insolvency and Bankruptcy Code, 2016, for brevity “I&B Code” read with Regulation 19 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Regulations, 2019, for brevity “IBBI (Personal Guarantors) Regulations” read with Rule 11 of The National Company Law Tribunal Rules, 2016, by Mrs. Rachana Agarwal, Resolution Professional of the Personal Guarantor Shankar Poddar praying for the following reliefs:

(A) Condone the delay in submission of the Resolution Professional’s report prepared under Section 112 of the Insolvency and Bankruptcy Code, 2016; (B) To Take on record the Resolution Professional’s report prepared under Section 112 of the Insolvency and Bankruptcy Code, 2016; (C) To approve the final repayment plan dated 3rd September, 2024 as prepared by the CoC on 3rd October, 2024 at the 3rd COC meeting and necessary directions be passed in terms of Section 114 of the Resolution Professional’s report prepared under Section 112 of the Insolvency and Bankruptcy Code, 2016; (D) Any ad-interim orders in terms of prayers above; (E) Any such other/or further orders.

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 A. Initiation of Insolvency Resolution Proceedings in respect of the Personal Guarantor: 4. The UCO bank being a Financial Creditor has preferred this company petition being CP (IB) 158/KB/2021 against Shankar Poddar, hereinafter referred to as the Personal Guarantor, “PG” in short, to initiate Insolvency resolution proceeding against the Personal Guarantor.

5. Upon hearing the said company petition, Rachana Agarwal was appointed as a Resolution Professional (RP) on 05.12.2023, in exercise of the power conferred under Section 97 of the I&B Code.

6. The Resolution Professional Rachana Agarwal had filed her report by way of an application being I.A. (IB) No. 379/KB/2024 and upon considering the merits of the case as well as the RP’s report that recommended the admission of the Personal Guarantor, the PG was admitted into Insolvency Resolution Process by this Adjudicating Authority on 30.04.2024, in terms of Section 100 of the I&B Code.

B. Public Announcement and Collation of Claims: 7. Pursuant to the order of admission dated 30.04.2024, the Resolution Professional issued a public notice under Section 102 of I&B Code on 15.05.2024, published in two newspapers i.e., in Business Standard (in English) and in Aajkal (in Bengali).

8. Upon such publication the RP received claims from UCO Bank Asset Management Branch and CFM Asset Reconstruction

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 Private Limited, and after collation and verifications, the RP registered and admitted the claims of the said creditors in terms of Section 103 of the I&B Code and prepared the list of creditors as per Section 104 of the Code, annexed at pages 22 to this application, which is reproduced hereunder:

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 C. Preparation of Repayment Plan: 9. It is submitted that the RP had mailed the personal guarantor on 10.06.2024 for certain documents and received the reply on 20.06.2024 from the personal guarantor acknowledging and admitting the debt. The personal guarantor agreed to prepare and submit a repayment plan in terms of Section 105 of the I&B Code.

D. Evolution and Voting: 10. Mr. Majumdar, Ld. Counsel for the RP would submit that as per Section 107 of the I&B Code, the creditors were summoned for meeting on 14.07.2024 and accordingly, the 1st meeting was convened on 16.07.2024, wherein all the details submitted by the personal guarantor was placed.

11. It is submitted that on 24.07.2024, the repayment plan was prepared and shared by the personal guarantor in consultation with the RP in terms of Section 105 of the I&B Code. It is further submitted that under the repayment plan the personal guarantor proposed to pay a sum of Rs. 25,00,000/- towards full and final settlement of the amount claimed to be default i.e., Rs. 10,84,69,853/-. The copy of the repayment plan is annexed at pages 29-30 of the application.

12. The said repayment was revised by the personal guarantor on 12.08.2024, as at pages 31-32 of the application.

13. Mr. Majumdar, Ld. Counsel for the RP would further submit that at the 2nd meeting of creditors convened on 17.08.2024,

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 the revised plan of the personal guarantor was deliberated upon and discussed, and the personal guarantor was urged to revise the same again. One of the creditors advised at the same meeting that a detective agency be appointed to investigate into the undisclosed assets of the personal guarantor. Accordingly, a detective agency namely NIS Facility Management Services Pvt. Ltd. was engaged by the RP and the detective agency submitted its report on 24.09.2024, inter alia observing that the several properties owned by the personal guarantor had been sold by him. The detective agency also found that a property at Jalpaiguri was acquired by the personal guarantor by a registered deed executed on 30.11.2012. The Copy of the report furnished by the detective agency is annexed at pages 37- 45 to this application.

14. It is further submitted that on 03.09.2024, the personal guarantor submitted his final revised repayment plan and proposed to pay the same amount which he had proposed earlier i.e., Rs. 25,00,000/-. The summary of the final revised repayment is submitted as under:

i. An upfront amount of Rs. 5,00,000/- will be paid immediately within approval of the repayment plan by this Adjudicating Authority.

ii. The balance sum of Rs. 20,00,000/- will be paid within 60 days of approval of the repayment plan by this Adjudicating Authority.

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 iii. The fees of the Resolution Professional will be paid separately over and above the amount of repayment plan of Rs. 25,00,000/- and legal expenses incurred by the Resolution Professional will be paid on actuals.

The copy of the final revised repayment plan is annexed at pages 46-47 to the application.

15. It is contended that the final revised resolution plan, inter-alia, contains a proposal to the creditors for restructuring of the personal guarantor’s debts or affairs. The final revised repayment plan also contains a justification for preparation of the repayment plan and reasons based on which the creditors may agree upon the plan as well as a provision for payment of fee to the Resolution Professional as stipulated under section 105 of the I&B, 2016.

16. Ld. Counsel for the RP convened the 3rd meeting on 03.10.2024, for consideration and voting on the final revised repayment plan. At the said meeting of creditors, CFM Asset Reconstruction Company having voting share of 92.4% voted in favour of the final revised repayment plan of the personal guarantor, however, UCO Bank having 7.6% voting share was dissentient to the final revised repayment plan. The copies of the minutes of the 3rd meeting along with voting result is annexed at pages 80-85 of the application.

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 17. In view of the decisions and voting result, the final revised repayment plan of the Personal Guarantor was approved by majority of voting shares of 92.4% at 3rd Creditors’ meeting.

E. Insolvency Resolution Process Compliances: 18. The Report of RP in terms Section 106 of the I&B Code, annexed at pages 48 of the application, goes as under:

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021

19. Further, it is submitted that the RP’s report under Section 112 of the I&B Code, annexed at pages 86-87, is as under:

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021

F. Our Inference: 20. Mr. Majumdar, Ld. Counsel appearing on behalf of the RP would submit that in terms of Section 112 of the I&B Code read with Regulation 19 of the IBBI (Personal Guarantors) Regulations, the RP shall file the repayment plan as approved by the creditors, along with the report in terms of Section 106 or Section 112 of the DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 I&B Code, as the case may be, with the Adjudicating Authority on or before completion of 120 days from the resolution process commencement date which is 30.04.2024 in this case and the said period has expired on 28.08.2024.

21. Ld. Counsel for the RP would submit that since the final repayment plan was submitted on 03.09.2024 and the same was approved on 03.10.2024, the RP could not file the application earlier. As such, the RP has prayed for the condonation of delay in filing the present application for approval of repayment plan in terms of Section 114 of the I&B Code.

22. We would note that at the 2nd meeting of creditors was convened on 17.08.2024, when the revised plan of the personal guarantor was deliberated and discussed. One of the creditors advised on the same meeting that a detective agency be appointed to investigate into the undisclosed assets of the personal guarantor. Accordingly, a detective agency namely NIS Facility Management Services Pvt. Ltd. was engaged by the RP and the detective agency submitted its report on 24.09.2024, inter alia observing that the several properties owned by the personal guarantor had been sold by him. The detective agency also found that a property at Jalpaiguri was acquired by the personal guarantor by a registered deed executed on 30.11.2012. The Copy of the report furnished by the detective agency is annexed at pages 37-45 to the application.

23. Upon a bare perusal of the detective agency’s report dated 24.09.2024, we find that the detective agency made a vigorous search in different Registry offices in West Bengal from January

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 2001 and found that the Personal Guarantor Mr. Shankar Poddar had sold out several properties. The Detective Agency’s report is reproduced hereunder:

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021

24. Surprisingly, we would note that at the 3rd Creditor’s meeting convened on October 03, 2024, no discussions were done regarding the observation of the detective agency, even its report was not placed. We would further note that under the final revised repayment plan the personal guarantor proposed to pay only a sum of Rs. 25,00,000/- towards full and final settlement against a whopping the amount as admitted by the RP of Rs. 10,84,69,853/-.

25. Earlier, in the matter of UCO Bank v. Mr. Subrata Das in Company Petition (IB) No. 286 of 2024 and I.A. (IB) No. 2023/KB/2024 reported in (2024) ibclaw.in 1225 NCLT, we had an occasion to share our experiences at para 10 of the Order that: “10. […] in an application under Section 94 or 95 of the Code, a “Personal Guarantor” is let off even with a repayment plan which proposes as repayment of 0.001% of the debt owed. Much of the exercise is futile.”

DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 Thus, the entire mechanism of resolution of the debt and default in respect personal guarantor in most of the case become fruitless and the objective of the Code is left unachieved. We are pained to note that at the time of executing personal guarantee, the bank does not see whether the recovery of the loan from such guarantee would be feasible and viable.

26. It is evident from the report of detective agency as extracted supra which discloses the deed numbers of all the properties which had been sold by the personal guarantor that they were executed between 2020 to 2023.

27. Such being the case, it would be expedient for the ends of justice keeping the object of the Code in mind to raise the certain queries as to:

i. Why the report of the detective agency was not placed at the 3rd Creditors’ meeting when the repayment plan was being considered and deliberated upon?

And, ii. How the selling out of the properties as indicated detective agency’s report dated 24.09.2024, has been dealt with by the committee of creditors?

28. We are aware of the statutory provisions envisaged under Section 114(1) of the I&B Code that the Adjudicating Authority shall by an order approve or reject the repayment plan on the basis of the report of the meeting of the creditors submitted by DIVISION BENCH, COURT NO. II KOLKATA I.A. (IB) No. 86/KB/2025 In Company Petition (IB) No. 158/KB/2021 the resolution professional under Section 112. Further, as per Section 114(2) of the I&B Code, the order of the Adjudicating Authority approving the repayment plan may also provide for directions for implementing the repayment plan.

29. We would refer to Section 114 (3) of the I&B Code, which stipulates that where the Adjudicating Authority is of the opinion that the repayment plan requires modification, it may direct the resolution professional to re-convene a meeting of the creditors for reconsidering the repayment plan.

30. In the above backdrop, to achieve the objective of the Code qua interest of all the stakeholders, we deem it fit to remit the repayment plan to the CoC to convene a meeting to review the plan and come back with a proper justification on the queries as mentioned above. Accordingly, the present application is put back on board.

31. List the main company petition and all the connected applications on 26/02/2025.

32. Certified copy of the orders, if applied for, be supplied to the parties upon compliance with all requisite formalities.

Madhu Sinha Bidisha Banerjee Member (Technical) Member (Judicial) This Order is signed on 19th Day of February 2025. Bose, R. K. [LRA]