Sashi Kabra vs Indian Bank & Ors
- CitationComp. App. (AT) (Ins) No. 2271 of 2024
Ratio decidendi
The rule this decision rests on
Where a Section 95 application under the Insolvency and Bankruptcy Code is founded on a demand notice in Form B, that notice cannot by itself be treated as a notice invoking the personal guarantee; invocation of the guarantee must precede the issuance of the Form B notice, as laid down in State Bank of India v. Deepak Kumar Singhnia, and an admission order resting solely on such a Form B notice cannot be sustained. Where the financial creditor's material shows no such prior invocation, the appropriate course is to set aside the admission order and revive the application before the Adjudicating Authority, allowing the financial creditor to file an additional affidavit placing material before it on whether the guarantee was invoked, so that a fresh order may be passed.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Comp. App. (AT) (Ins) No. 2271 of 2024 & I.A. No. 2026 of 2026 IN THE MATTER OF:
Sashi Kabra ...Appellant(s)
Versus
Indian Bank Stressed Asset Management Large ...Respondent(s) Branch (SAML Br.) & Anr Present: For Appellant : Mr. Avishek Guha, Soumya Dutta, Siddhant Upmanyu, Adv. For Respondents : Mr. Santosh Ray, Ishan Chowdhary, Ashmita Lohia, Srishti M., Muskan Khatana, Adv.
ORDER
(Hybrid Mode) 21.05.2026: Heard Ld. Counsel for the Appellant and the Bank.
2. This appeal has been filed against the order dated 03.10.2024 passed
by the NCLT, Kolkata Bench -II by which the AA has admitted Section 95
application filed by the Indian Bank, Respondent herein.
3. Ld. Counsel for the Appellant challenging the order submits that the AA
has relied demand notice in Form B dated 01.06.2022 as a notice for
invocation of guarantee which cannot be held to be a notice invoking
guarantee as laid down by this Tribunal in State Bank of India Vs. Deepak
Kr. Singhnia. It is submitted that the Bank has not placed reliance on any
other notice invoking the guarantee, hence, the application is not
maintainable.
4. Ld. Counsel for the Bank submits that the Bank has sufficient material
to satisfy that guarantee was invoked of the personal guarantor and the Bank
may be given an opportunity to file an additional affidavit before the AA
brining the material to show that guarantee was invoked.
5. We have heard Ld. Counsel for the parties and perused the records.
6. The order of the AA admitting Section 95 application is based on Form
B notice dated 01.06.2022 and on the said basis and the report submitted by
RP application has been admitted. It has been held by this Tribunal in State
Bank of India (Supra) that invocation of guarantee has to be prior to issuance
of Form B notice. We are thus of the view that the order of the AA admitting
Section 95 application cannot be sustained only on the basis of Form B notice,
however, the end of justice be served, if, we revive the application of the
Financial Creditor before the AA for passing a fresh order by giving
opportunity to the Bank to file an additional affidavit. The Bank is permitted
to file an additional affidavit before the AA within three weeks from today.
Reply to the Additional Affidavit be filed by the Appellant within three weeks
thereafter. Both the parties are liberty to make an application before the AA
after six weeks for fixing a date in the matter. The impugned order is set aside.
The appeal is disposed of.
[Justice Ashok Bhushan] Chairperson
[Mr. Barun Mitra] Member (Technical) Sheetal/Manu
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